Hi!
Those familiar with the area, any no-go zones? Where are the housing commission areas etc. Have started eye-ing this place for IP#3
Budget permitting I would stick with Mount Druitt and suburbs on the train line.
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Budget is fine, I have a couple in St Marys already and would like to branch out a little more.
I realise Mt Druitt has much larger potential with the train-line, access to highways and bus hub.
Yet I wonder, would Mt Druitt to already be 'over-priced' as such with all the investor activity there?
I don't think so on the basis that a had a client purchase a 3 bedder 2 weeks for $315k. It was in a cul-de-sac, brick and 7 minute walk to the station. They were going to live in the property but it was being rented for $350 per week. Had good potential for a renovation however it was rented so the reno could have been done at a later stage.
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Hi Shahin,
Just crunching numbers:
$315,000 x 1.05 = $330,750 (for stamp duty and other fees)
$350/week x 52 weeks rent = $18,200
$18,200 / $330,750 = 5.5%
Assuming 6% interest rate, + 1% (for pm fees, insurances, etc), it ;ooks like they are already 1.5% out of pocket depending on depreciation.
How old is the property? How large is the land? Can a granny flat be built on the back?
I am/have been targeting a minimum of 7% returns with the option of developing on the back for higher returns.
Has anyone been getting the better returns here on recent purchases? I would love to hear about it. I do agree with Shahin that there is still capital growth left in the area.
G'Day NHG,
The property is on a 550sqm block and i am relatively confident GF should not be an issue. The agent mentioned to them that with a very simple reno they could get $400 at the very minimum. My real interest in the property was the CG potential. You can do a lot (by way of CG) with a brick house, close to the station and in a cul-de-saq with massive reno potential.
A mate of mind who has a few properties in the area has alerted me to the number of housing commission properties in the bidwell and treager areas (as per your original post).
Regards
Shahin
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Hi NHG,
I have a property in the neighboring suburb of Whalan… it's a 4 bed place I bought in March this year for $242000 and rents for $360. For a 4 bed the agent says it is conservative, and seems to be cheapest 4 bed rental in the area (apart from Tregear), so gets demand. I'm happy with the 7.7% yield and no work done.
My advice would be ask managing agents what is in demand. I was there are never enough 4 beds on the market so that's what I aimed for.
I had a look at Bidwill, Emerton, Tregear, Wilmott, Whalan, Mount Druitt, and St Marys.
I think I missed the boat with cap growth on houses in Mount Druitt and St Marys as prices seem to have increased just while i was searching to buy. The others present good value still but I can see they too are increasing, albeit more slowly.
As a debatable topic, I thought the quality of Tregear and Wilmott houses and how tenants were maintaining them was quite poor compared to Whalan. Bidwill and Emerton which all seemed OK to me. For Bidwill and Emerton in particular there, from memory there is a crossroad of shops containing a Woolworths around there, a good school and sports fields, so I don't think being a bit away from the train station is that big an issue. There are plenty of bus routes.
One thing to watch for is the prevalence of power lines which run in many parks behind the houses… it puts some people off due to A Current Affair running cancer scare stories every so often. You can easily see these on Google Maps though. Also, while on the map just check if it's a battleaxe block, as they are common too. Again, not necessarily a problem but may limit any buyers you want to sell on to in future.
Try and look for properties that have other bonuses – such as potential to subdivide, add a granny or just renovate for improved value. I didn't unfortunately, so am only hoping the market goes up in the area!
Good luck!
The suburbs of Mt Druitt (2770), Tregear, Bidwill, Whalan etc all have housing commission houses.
I
You can look on RPdata to see how many housing commission nearby. There is a map somewhere that shows the HC houses in red. Can't remember where it was.
Look at the neighbours houses. Ig the street looks well cared for it can be a goer. When going to opens etc see if you can see the neighbours. There are some pockets that I wouldn't touch. Some streets are lovely.
Things are certainly moving in this area but if you shop around you can get 7% yield. Even more with a reno.
I’m considering buying pretty much right within the HC area of Bidwill. Bad idea even if I purchase the property for super cheap? Theory being the area is being cleaned up slowly but surely.
It somewhat strays from my criteria, as it is far from train stations tho well services by busses. Too big a risk?
I'm currently looking in the 2770 area. Consistently finding properties (townhouses and units mainly) for low 200K renting for low 300. Many need some cosmetic work (paint, carpets etc) to get a higher rent but many are already rented at CF+ prices. While CG might not be huge, the potential to add value is there.
Any updates NHG? Did you go ahead with any purchases?
Hey,
Picked up a third property in St Marys. Nothing in Bidwill. The exHC properties are selling WAY overpriced at the auctions IMO. Also Bidwill is a little too rough for my liking, esp around Kidd Cl.
Shifting across to small subdivision and construct now, getting a little bored of buy-renovate-rent
What's your definition of overpriced? Also re the subdivison and construction – I can't see good margins there – how are you finding it?
Regards
Shahin
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Anything in a HC area that doesn’t gross 7% and hasn’t got a potential for a granny flat as well. The returns seem fine now, yet with minimal depreciation and rising interest rates in the future, any less and you will be in trouble.
No haven’t seen anything for subdivision there. All the agents say $100k per land base is ok, I don’t think anything more than $50k will give any profit. I did find a mentor that does just that. Exciting times ahead.
Yes completely agree on the $50k part.
Regards
Shahin
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With the HC properties, you are competing against bidders buying through SMSF.
Perhaps they pay more due to lower interest rates and a perception the property will be 'stuck' in the fund for a long time untouched.
There has certainly been some good CG in the last few years in 2770.
Rents have stabilised and demand is there for reno stock which is also pushing prices up.
The yields are still good but not like they were a few years ago.
As mentioned you need to be careful with selection of area and particularly streets within areas. Pick incorrectly and you'll always have difficulty getting decent (or any) tenants.
Funny you should say that as I have recently been doing bucket loans from Blacktown onwards. People just need to be careful of the renovation aspect (and of course the amount of unapproved granny flats)!
Regards
Shahin
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Just spent all morning looking at opens. Thinking of moving on a couple – one in St Marys and one in Emerton. Bit nervous because I'm so new to the area but you got to jump in sometime!
I haven't been looking at HC because of the general consensus that everyone is going for them, I might head over to a couple of auctions for a stickynose to see what all the fuss is about though.
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