Western Sydney – Blacktown or Granville?

Hi Michael,

I've been tracking both suburbs over the last year or so due the their affordability and proximity to the CBD and it seems as though the two are frequently touted as being good investments. Blacktown does indeed receive more attention but I think this may be due to the size difference and number of properties on the market, it has around 280,000 residents whereas Granville is a much smaller suburb with nearly 23,000 residents.

Both feature in the 'Annual Hot 100' of this months API with Granville receiving a 4 page assessment of its pros and cons (Blacktown was featured in the Dec 2011 issue). Personally I would be looking to take advantage of the 'ripple effect' that should occur in Granville seeing as it's only a 30-40min train ride into the city and its closeness to Parra is definitely a a big positive. These kinds of suburbs usually become gentrified and slowly begin to demand higher prices as time goes by (Redfern is a perfect example of this).

Old units aren't necessarily a bad thing, if they are structurally sound then they might be perfect for a reno that generates a decent equity gain (and possibly positive cash flow… if you're very lucky!).

Have you been to either suburb yet and talked to the REA's that work in there? If not, it would be a great idea to do some personal recon and find out some information first hand.

Kind regards,
Derek

You need to evaluate what things you believe will drive price growth in the two respective areas.  For example, when a new road is built in a town, it makes it easier for the residents to commute in and out of the town, and may make it faster to commute to work in the city.  Thus the desirability factor of the town can increase. You also want to evaluate what the demand is for rentals in a town, versus the number of properties available for rent.  If there are more properties available for rent than there are prospective tenants, then you might find yourself having to discount your rent to attract a tenant.  You want to understand how much out of pocket (or ahead) you will be after the rent money has been eroded by mortgage payments, and paying the bills such as insurance. You also want to evaluate how you can immediately add value to your property, thus making it worth more money, and being able to hike up the rent.  Can you renovate?  Can you add a granny flat to the backyard to enable a second tenancy on the site?

These are the sorts of things you want to evaluate.  Don't get too caught up on whether you should stick like glue to suburbs close to Parramatta.  Stick to facts and numbers.