Hi I'm a first time investor in Sydney and would like some opinion on this property I am looking at.
Location- Homebush West
Rent- 400p/w
Config- 2bed, 2.5bath, 2carpark (Balcony with Pergola)
Plan- 145m2, split level
Building- Level 2&3 for a 3 levels apartment
Strata- approx 500p/q
Common Area- none, except for the usual lifts and hallways
Asking Price- $350,000I'm about to purchase a strata and building report.
I've checked with NSW OSR and I should be eligble for the $14,000 grant (will leave there for 1year). Never invested in Sydney before but Homebush West seems to be a nice place (currently renting). My only concern is there seems to be a few developments there. Distance from the city seems to be ok approx 15-20km? Is there anything i should also be looking at that i've missed?
Please share any insights.
Thanks
Hi Dacloud,
The rent looks pretty healthy for a $350k price and strata is reasonable at $500/qtr.
Some other things to consider is how much money is in the sinking fund and if there have been numerous
maintenance jobs done to the units in the building. If there is a history of maintenance work required in the
units, then it's not a good sign. The strata report you are about to get should tell you this.The other thing to look out for is the ratio of units leased out versus units owner-occupied. Buildings with a fair portion of owner-occupiers are generally better maintained and hence better prospects of capital growth. It might be difficult to find this out but see if you can suss this out with the selling RE agent (not that his/her word can be trusted 100% true though).
If you plan to live in your apartment for 1st 12 months before renting it out, then you will benefit from reading my article on the 6 year CGT main residence exemption rule. Feel free to shoot me an email if you'd like a complimentary copy of this article.
Kevin
Thanks for the tips.
I wasn't able to find out much about the building's "units leased out versus units owner-occupied" ratio, but for Homebush West in 2006 approximately 59% were renting.I've just read the building report and it found that the balcony has water penetration damage as a defect. And that it's causing rusting and peeling paintwork. The inspector believes it may cause approximately $10k to fix. Is this something that can be fixed the original builder under warranty?
Thanks
That is a body corporate issue – you will need to check whether this has been raised with body corporate/strata manager. In nsw unit builders are not required to have warranty insurance (just need to check http://www.fairtrading.nsw.gov.au ) – if the building is more than 7 yrs old then you wouldn't be able to have a claim.
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