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the corner of a main road. Tenants would expect to pay at the
lower end of the market given the condition of the property,
which would be about $350 per week to $380 per week.
¿ WHAT ARE ITS PROS AS AN INVESTMENT PROPERTY?
FH: It’s a corner block that’s less than 10 minutes’ drive to the
train station and two minutes’ walk to the bus stop. It’s in close
proximity to schools and shopping. The area’s recent vacancy
rate of 1.3 per cent is less than the vacancy rates of both the
Sydney outer areas and Sydney in general. Equally important,
it’s a property an investor can periodically add value to as and
when the market demands, thus achieving a faster return on
the renovation costs. It also has the potential for redevelopment,
subject to council approval.
CR: Close proximity to transport, such as buses, M4, M7 and
train, schools and Blacktown city centre, as well as employment
in the many business centres in the area. There’s also growing
businesses along those main arterial roads close by. The property
is located on a corner block with dual occupancy potential,
subject to council approval. There’s plenty of scope to add value
to the property to generate equity and increase the potential
¿ WHAT ARE ITS CONS AS AN INVESTMENT PROPERTY?
FH: Not much really other than possible extra repair costs due
to its age and construction material – in other words, it might
require more regular maintenance than a newer property.
CR: The property appears to require a fair bit of work, including
kitchen, bathroom, flooring, window furnishings, light fittings,
driveway upgrade, fencing upgrade, landscaping etc. in order
to maximise ‘sweat equity’. Therefore, if there isn’t the budget
available, the property won’t suit. It’s also located on a very busy
road and in close proximity to department of housing properties.
This can affect rental appeal, increase vacancy times and future
¿ WHAT ADDITIONAL QUESTIONS WOULD YOU ASK
CR: The only questions I would really ask would be centred
around the motivation for sale. This should always be asked to
ascertain the flexibility of the vendor and gauge the room for
negotiation. A shortened settlement period or other conditions
suited to the vendor may make your offer more attractive if it’s
made under the list price.
¿ WHAT IS THE MARKET OUTLOOK IN THIS SUBURB AND FOR
THIS PROPERTY TYPE?
FH: Blacktown isn’t only the most populous local government
area in NSW, but it has had the fastest population increase in
the last five years, equivalent to 11.5 per cent, compared to the
state rate of 4.7 per cent. The government is responding to this
trend by planning and implementing substantial infrastructure
projects eg. the North West Rail Link, Blacktown city centre and
the Blacktown sports park.
CR: Blacktown’s prospects continue to look solid with
continued population growth. The increased attraction to the
west for businesses aids that growth. Many major national and
international companies have moved their head offices and
distribution centres to areas along these major motorways.
¿ WHAT SORT OF INVESTOR WOULD THIS PROPERTY
FH: The seven-year-plus investor – the patient type.
CR: This property wouldn’t suit an investor where cash flow is
of importance, or an investor unwilling or unable to undertake
value-add renovations. It’ll suit a buy-add, value-hold investor
with a long-term capital growth priority versus rental yield. The
investor would need to have the capacity to negatively gear.
¿ AT ITS PRICE RANGE, WOULD YOU LOOK TO TALK TO THE
AGENT OR WALK AWAY?
FH: Talk. While the asking price overestimates the intrinsic
value of the property, it’s nonetheless worth pursuing but
certainly not beyond the current fair market price. After all, there
are other properties for sale.
CR: I would walk away – there are much better investment
options available. The asking price is higher than the median
house price of $450,000 (Source: API, page 122). Given the
condition, location and work required, you wouldn’t consider
a purchase price near that of the asking price here. Investing
in the Blacktown area was a much better option a few years
ago, but at the moment, it’s way too hot. There are many other
options in terms of more affordable entry level with good growth
potential and rental yield.
¿ PRESTON, VIC
$395,000 - $425,000
It’s a suburb with hipster appeal
and great community facilities.
At just nine kilometres from the
Melbourne city centre, Preston has
plenty to attract owner-occupiers and
The selected listing is an apartment of contemporary design
and high level finish. The property provides two-bedroom
accommodation with a secure single car space. The property
has an asking price of $395,000 to $425,000, and an estimated
rental of $370 to $400 per week.
Director, Clear Property
¿ WHAT WOULD BE THE APPROXIMATE RENTAL RETURN
JS: $350 to $370 per week based on comparable rentals in
SC: We would expect a rental return of between $360 and $380
æThe only questions I would
really ask would be centred
around the motivation for sale.Æ
OPEN FOR INSPECTION //
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