Buying an Investment Apartment.which One Would You Choose?

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  CyberMurning on 27/02/2016 - 16:11

  Yeah to attract customers they put low strata, once finish yes you pay that amount but only two times then started to go up. They can't be blamed because they are smart.

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  [Deactivated] on 27/02/2016 - 16:15

  +11

  If you're looking for capital gains, do not buy a property now. Hold off for 6 months. Even if you don't, its ill advised buying an apartment for capital gain, buy something with actual land, not bricks in the air.

  • 

    ohmumma on 27/02/2016 - 18:23

    I have to agree with this - I wouldn't buy an apartment for capital gain.

  • 

    Holysmoke on 27/02/2016 - 20:12

    +2

    What's happening in 6 months time?

    • 

      [Deactivated] on 27/02/2016 - 20:36

      +3

      Pop

    • 

      datafellows on 28/02/2016 - 10:51

      It was estimated last year as there are so many apartments coming to market these few years the apartment prices will fall in Sydney.

      • 

        Holysmoke on 28/02/2016 - 12:37

        +4

        That what they say every year.

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  kingmw on 27/02/2016 - 16:32

  +2

  The likely reason Apartment B has a cheaper rent is because there is less demand for apartments in that area. As you said, no trains (hence limited work options unless you drive) and good schools (hence suit families that would choose a house over an apartment).

  Also as stated above, if option B has a pool and assuming it has lifts, then the strata is way to cheap.

• 

  naritas on 27/02/2016 - 20:15

  +7

  Some general tips:
  1. The old adage is that land appreciates over time, structures depreciate over time. As such, if you really want to buy a unit for capital growth (and not a house), choose one in a relatively small block (as your percentage of land entitlement is higher ceteris paribus).
  2. Obtain a copy of the strata report and check the status of the sinking fund and operational costs of each block. Small strata now does not always = better investment. Theoretically, strata costs should be used to maintain and renovate the building and facilities. This adds to the value of the units when used correctly. If the fees are high and sinking fund is low, it's a pretty big red flag that the block may have managerial or design/structural issues.
  3. Do your research. Don't fall for glitzy sales people and flashy presentations…get some reports from RPdata/corelogic, SQM research, etc. They'll be worth their weight in gold for a purchase in the areas and price ranges you are evaluating. Common traps for novice buyers in your price range is buying new property (which is highly speculative at present given the interest from foreign buyers in that segment…which is not necessarily bad if your speculation is correct, but could be awful if it is wrong) and using a buyers' agents for such a straightforward transaction. A buyers agent may add value for more complex transactions but their ought to be ample data available for such popular suburbs at such a middle of the road price range (for those areas) which means your money could probably be better spent on something other than their fees.
  4. DO NOT use a solicitor or mortgage broker recommended by or aligned with the vendor or their agent. If you are seeking advice to help with due diligence regarding the property and the finance structure (which is possibly a good idea) make sure that the advisers are fully independent of the vendor and their agents.

  Hope this helps.

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  Marcsie on 27/02/2016 - 20:44

  -2

  Either of them, I would buy a house with a nice block of land,close to train station or public transport,and of course close to shopping centre :)

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  FiDad on 28/02/2016 - 11:45

  I am assuming option A is monarco estate which is pretty good place to live but I am not so sure about capital gain as prices increase a bit slowly there due to high strata although there is avery high rental demand. Baukam hills might have more more capital gains in the same time period due to schools in the area

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  tonyjzx on 28/02/2016 - 11:48

  Is it just me or is there just not that much capital gain in $600k units in n.w syd. not even in 5-10yrs time, esp. with all the new apartments coming up in better areas like macquarie epping carlingford etc.

  Also the sums on those vis a vis purchase vs. rental costs dont add up

  If I buy a place for $600 and it rents for $590 and I'm up for crazy ass strata fees then I'm not making money.

  • 

    Sweetnsour on 28/02/2016 - 19:12

    There is less capital gains, but judging by OP budget, unless they want to buy in the Blue Mountains or regional, there isnt many houses in Sydney sub $700 mark especially within 1 hour distance from CBD. I would reduce your expectations of big capital growth in apartments, it would likely be subdued market due to increase in apartments coming online soon and supply creeping above demand especially in west Sydney.