I have been doing an analysis on a Sydney property & have the following scenario racking my brain:
I have found a property off-the-market with the following attributes:
? 1 bed, 1 bath, 1 car
? 58sq/m plus car space
? Approx. 5kms from CBD
? Walking distance to train station & supermarket
? Small unit block (older style)
? Low Body corp
? Potential for cosmetic reno
If I secured this property for $550k & continued tenanted @ $500 p/wk, based on 5.00% capital appreciation going forward it would only take under 4 years for it to become CF +?ve. My CF calculator tells me it will only cost me $29.00p/wk after tax with borrowing 105%.
By all accounts this seems pretty close to a risk-free purchase for the following reasons:
? Close to CBD
? Low out of pocket cost per week
? Sydney population growth expected to continue
? Rates to stay low for at least a few more years (my opinion)
? Blue-chip suburb with low vacancy rate & appeal to renters
This has the foundations of a decent purchase, my only worry is buying at the top of the cycle. Plan is to hold this long term (never sell) & potentially use as PPOR in the near future (3-5years) so maybe the cycle doesn?t even matter?
What are your thoughts? Should I be this worried about buying at the top of the cycle? Economic commentators all saying there is a bubble etc & its making me hesitant.
Thoughts on this sydney purchase?
I have found a property off-the-market with the following attributes:
? 1 bed, 1 bath, 1 car
? 58sq/m plus car space
? Approx. 5kms from CBD
? Walking distance to train station & supermarket
? Small unit block (older style)
? Low Body corp
? Potential for cosmetic reno
If I secured this property for $550k & continued tenanted @ $500 p/wk, based on 5.00% capital appreciation going forward it would only take under 4 years for it to become CF +?ve. My CF calculator tells me it will only cost me $29.00p/wk after tax with borrowing 105%.
By all accounts this seems pretty close to a risk-free purchase for the following reasons:
? Close to CBD
? Low out of pocket cost per week
? Sydney population growth expected to continue
? Rates to stay low for at least a few more years (my opinion)
? Blue-chip suburb with low vacancy rate & appeal to renters
This has the foundations of a decent purchase, my only worry is buying at the top of the cycle. Plan is to hold this long term (never sell) & potentially use as PPOR in the near future (3-5years) so maybe the cycle doesn?t even matter?
What are your thoughts? Should I be this worried about buying at the top of the cycle? Economic commentators all saying there is a bubble etc & its making me hesitant.
