Back to the maggot topic, we had some in our rental house on the floor and sofas! It was really freaky and confounding until we realised they were dropping from the light fixtures. Someone had put a box of Ratsak poison in the roof, so when a rat ate it, it crawled under some insulation batts and died so we couldn’t locate it. AFter a week, the most terrible odour started emanating throughout the house. It was by following literally my nose up inside the roof with a torch that I eventually found the dead rat, covered in more maggots. I had to scoop it into a plastic bag without gagging, throw it in the bin and look forward to garbage collection. The bin stunk for weeks. I bought industrial strength de-odouriser and problem solved. Plus, I removed the Ratsak box.

it came back at only $145k rather than the $200k it came back at in early 2013.

Hi Dark Knight,

That’s a really interesting story about BInvested. I always wondered how their clients achieved so many rapid property purchases.
On the whole though, are the properties still cashflow positive? I imagine it will only be an issue for you if you came to sell in the near term future. Is there any other downside to your holding them?

No…in the end I flew up there a few times, got to know good/bad areas and bought a house in the centre which ended up going to a sealed bid.
At the time I thought I had paid too much but agents have told me it would have risen in value by now.

A buyers agent probably could have got me a better deal but I have some trust issues that I always struggle with.

It depends on what you want to do with the properties.
If you are looking to improve value and get capital gains, I guess you could do that more easily with a house with potential to build granny flats, renovate, develop etc.

If you are looking to just buy and hold I always find units are easiest because of very low maintenance. Some would argue that you have to pay body corporate/strata but with a house you have to pay high building insurances anyway, so works out the same in my opinion.

In any case, if I had nailed down the suburbs I was targeting I’d be focusing on yields to ensure my holding costs were kept low.
In the case of St Marys, units would be my bet. 6.13% isn’t spectacular, but it makes it affordable to hold.
Units: 6.13%
Townhouses: 5.71%
Houses: 4.67%

To further research and make sure you’re choosing the right type of property take a look at what types of dwellings most people live in on the ABS website:
http://www.censusdata.abs.gov.au/census_services/getproduct/census/2011/quickstat/12405?opendocument&navpos=95
Scroll down to the Dwellings section.
Looks like most people live in a 3 bedroom house, followed by townhouses, then units.

So houses are more popular but more expensive to buy and hold.
Units are cheapest with highest yields but possibly not as much in demand because renting a house is probably almost similar price to renting a unit – so you’d have to find something quite special about it (location to station and shops? renovated? new?)

I have investments (both a house and a unit) in both and I have to say they are currently performing pretty evenly.
Campbelltown has the widening extended highway program underway, whereas Penrith area is undergoing quite a lot of gentrification and investment itself. Being part of Sydney I don’t think you’ll have too much trouble renting out in either suburb, particularly if you choose areas close to facilities such as shops, public transport, or good schools and don’t choose to buy on a busy main road.

If I had to choose however I would go Penrith. The hospital is undergoing expansion, you’ve got the Western Sydney University which is also expanding, the Westfield is great, slightly closer to Badgery’s creek so you may get an influx of workers there. There’s also a new IKEA being built in nearby Marsden Park.
The biggest reason for me however is that Penrith is at the foot of the Blue Mountains, so there’s not much further they can build out there. Limited land will result in higher price increases in future.

Hi Ryan,

Definitely try and get CF+ if you can. I always aim for at least 1% higher than the mortgage rate you are likely to be paying to cover any costs such as rental management, insurance, rates etc. And for added security you may want to fix while rates are at their historic low (but that's your call).

The reason to try and avoid negative cash flow is if you're trying to build up your portfolio your borrowing capacity will be limited on your second+ properties. I think many banks only consider about 70% of the rental income to cover their risk thresholds as part of your total income, so servicing additional properties/debt would limit how much more they will lend you.

As from your research, it looks pretty spot on, but the two factors that I believe drive capital growth of an area is high yield and the locals having an income that is seen to be increasing (checkout the Australian Bureau of Stats for this data). Historic growth data is never guaranteed to be an indicator of future growth, so I take that with a pinch of salt personally. Others may have differing views.

Hi there,

Two years ago I remortgaged a property I own in London on an expat's mortgage. I found Sherrie See from SeeMoney.co.uk  to be very helpful in this…and she even posts the interest rates on the website.

http://seemoney.co.uk/pages/offshore/expat_mortgage_rates.asp

As you can see the LVRs are pretty tough around 75%, so fortunately we had some equity already over there.

Having said that as JacM indicated above there are UK banks in Oz that may be a good place to start too. I hear Lloyds TSB do a lot of expat mortgages. 

I'm considering getting one for my IP – but think I can only get it in the livingroom since the bedroom faces the front of the unit block and I don't think the body corp would allow the extractor to sit on the front of the building. Would tenants still value one in the living only?