hi all just wondering what you all think of the mtt Druitt area and St Marys in Sydney ? are they just great for postivie gearing or grow as well? as do you think 3 x3or 4 bedders priced around $310000 will do any good in St Marys ? Will they sell? any advice will help , im also looking for a good/cheap builder !!
Anne,
the dreaded & St Marys are both a part of Sydney. As such, they will not be left behind, although there may be some lag. High numbers of lower demographic incomes but still plenty of demand for home ownership.
Remember that it will be necessary to build to the market ie do not over spec the houses .
Hi Anne,
I was a local and grew up in the west- Rooty Hill to be exact. I have a very good understnading on the suburbs your are discussing, down to the streets and schools. I would be happy to discuss with you offline.
I am located at Castle Hill- so still around the corner.
hi Scott
im guessing you mean that it can be done , just be careful as there wont be too much profit margin in it , as well as make the house simple ?
ps love your quote!
Thanks
Annehi number8
i will talk to my partner and call you if i need anything .
Thank you
AnneHi,
You need to be more specific about which suburbs within Mt Druitt you are looking. i was born there and now live 10kms away.
Mt Druitt itself near the westfield and railway station, there are some good buys, especially the newish 3 bed units on hythe st. Plenty of depreciation and good yields. can buy for $230k and rent is around $310 per week.
I wouldnt purchase near Blackett for example…..
St Marys has its good and bad pockets. Closer to werrington would be a better purchase.
If you are looking for good yield or a neutral investment then go for it but dont rely on huge growth…
on channel 10's "recruits" last night they mentioned Mt Druitt is officially the 'busiest' police station in the west…
A unit in Mt Druitt as a good buy?
Depreciation as a factor or reason to buy? Definately for the selling agent to market the property as a good buy (refer below to see this is not the case).
Good yield?
Lets look at this…Buy $230k and rent for $310- Her goes the positive gearing salesman again? Further to the fact that it is not good yield, it is in a low growth area. A development site like this is not exactly family orientated or like. Is this the type of property you want to hold for thirty years?
Lets look at this, Buy price for $230k, legals, stamp, LMI if applicable, pest, building etc Total $250k-
On $250k, Interest p.a. = $17.5k @ 7%
Expenses including strata, rates, management fee, maintenance, insurance, water = $5k
Rent= $16k at $310 (if you get a solid tenant).loss= $6.5k + the opportunity of Nil growth.
Oops, I forgot the depreciation, throw in building write off on this property value of say $1500.
Net Loss: $5000 p.a.
Stay clear,
anne25 wrote:hi all just wondering what you all think of the mtt Druitt area and St Marys in Sydney ? are they just great for postivie gearing or grow as well? as do you think 3 x3or 4 bedders priced around $310000 will do any good in St Marys ? Will they sell? any advice will help , im also looking for a good/cheap builder !!G'day Anne25,
For building relationships with builders, RE agents, accountants etc aim to do a job that they would be pleased to be associated with not 'cheap'. If you plan to be in the RE game for a while and not have to continually look for builders etc, do things that will last and expect the same from the professions that you employ/make associates. If they do not perform keep looking until you find one that does and do everything to make it easy for them to work with you. This will allow you to retain them and they will continually want to work with you, you can then stop looking.
IRT the property that you specified that is one of the great things with RE a 310k property may or may not do well. Without getting into great detail its up to what you plan to do to the property and then how you market it, don't just rely on a for sale sign out the front and an ad on the net, be proactive and at least make phone calls and conduct letter drops in your area, it requires a plan, time and effort but is well worth it and you sell more properties that way. Talk to your local RE Agent and ask for the RP data on a similar property in the area currently for sale to get an idea of the sales in that area and make comparisons. Happy investing.
number 8 wrote:A unit in Mt Druitt as a good buy?Depreciation as a factor or reason to buy? Definately for the selling agent to market the property as a good buy (refer below to see this is not the case).
Good yield?
Lets look at this…Buy $230k and rent for $310- Her goes the positive gearing salesman again? Further to the fact that it is not good yield, it is in a low growth area. A development site like this is not exactly family orientated or like. Is this the type of property you want to hold for thirty years?
Lets look at this, Buy price for $230k, legals, stamp, LMI if applicable, pest, building etc Total $250k-
On $250k, Interest p.a. = $17.5k @ 7%
Expenses including strata, rates, management fee, maintenance, insurance, water = $5k
Rent= $16k at $310 (if you get a solid tenant).loss= $6.5k + the opportunity of Nil growth.
Oops, I forgot the depreciation, throw in building write off on this property value of say $1500.
Net Loss: $5000 p.a.
Stay clear,
You have overestimated buy costs. eg You don't get pest and building with a unit. That is covered by body corp. Strata search is $40.
$5K for yearly costs is a bit high too so deduct $2,000 a year. Depreciation is higher that $1500 because the ones mentioned are not that old. So another $1,000 min.
So it's down to $2,000 a year. AND there IS capital growth. Hythe st units were selling for $180K in early 2009 (2 bed).
Are you making the assumption that all of Sydney (except these units) will go up or are you saying no where in Sydney is going up? or only the west will not go up? It doesn't make sense to me. I just look at the data.
I can supply some if you like.Mt Druitt is a good area which is changing.
You can buy units there still in 160k's which rent for 280pw.
I just bought 3 properties last week there for investors under 200k renting for 300pw.
thanks for the support guys.
I do love to hear everyones differing opinions though
But yes those costs were overestimated.
Firstly, I am not sure why anyone would want to go into an acquisition without an over-estimation on costs, I suppose this is me being conservative and why I do have millions today…….
I am not one to argue over $500 here or there, you can take off $10,000 on buy costs and the interest drops by $750. Not much change to the outcome,
Depreciation is 2.5% of the construction cost, I do not think the construction cost is the same as the purchase price, you will have trouble fighting this out with the ATO (remember I am conservative and do not like to mis-lead people, I will not assume people are on the top tax bracket but am happy within the 31.5% range).
Nathan, just because you bought three people properties in this area, doesn't make it a good buy? What did you earn from your investors for this effort. I hope you can tell us you didn't charge them $7k each so we can at least say your advice is independant/ transparent.
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