Hi,
In terms of a “buy and hold” the 2-3 units vs 1 house strategy itself, you are right it will provide you with a more consistent cash flow. There is a likely chance the cash flow would be better overall as units tend to provide better net yield even after costs (and tax).
Well selected and/or well bought units can potentially provide equal capital gains to houses in the short term (2-3 years) but are probably more scarce.
Recommend that you read Steve’s 1st book before you do anything. It helped me heaps!
Regards
CHi Daniko,
I specialise in selling properties in the Hornsby region, and am not familiar with other parts of Sydney, so I couldn’t tell you why there are a lot of properties on the market in Campsie, other than the fact that 1. lots of people are looking to get out of the area for some reason or 2. there aren’t a lot of people that want to move into the area for some reason. What are the crime statistics there? Just a thought! Do you r research and ask the agents themselves. They should tell you.All of my investment properties have been bought with an interest only loan over 5 years, you simply refinance at the end of the term if you haven’t sold it beforehand. If I buy a property to live in, I borrow P & I usually over 30 years to keep the repayments as low as possible, but try and pay off as much as I can as soon as I can to reduce the principle and hence the total interest paid. When times get tough, you can always go back to paying the minimum amount required.
The general rule of thumb with properties increasing in value is that they will double every 10 years. If you pick well, it might be sooner, if you pick badly, it might be later. Personally, I won’t buy units simply because the land component of any property is what will increase in value, buildings only depreciate! The council only has to rezone more air space for developers to buy units and your investment is lot likely to increase in value for some time to come as the supply will outstrip the demand. But that said, my first investment property was unit as that was all I could afford, so don’t be put off if that is your only option.
In Sydney where I live, there is no more land, although that doesn’t apply to all areas of Sydney, particularly out west (and look what’s happening out there). That said, if do your homework in any area that you are contemplating buying in and the deal looks good, then go for it!
As to your question as to which area of Sydney that has the most demand and vice versa ….pick an area and look at the surrounding infrastructure. How many primary and high schools supply the area, what is transport like? Are there good shopping facilities (Westfield only goes where the going is good!), hospitals, main roads? Go to council and ask them if large companies are looking to move into the area and set up shop (Govt. depts, company headquarters etc) All these things will point you in the right direction.
Your biggest mistake will be to do NOTHING! Don’t be paralysed by fear, do something and if it’s wrong, fix it and learn from your mistakes. It will make you much stronger! Good luck.
Regards
LindaDear Linda;
You are wonderful!!! thank you for all advices. You helped me a lot.
Cheers
Daniko
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