Why people have no idea how to invest in the Seven Hills area
There are a number of reasons why people are not able to take advantage of property investments. A few of these can be broken down to a couple of key areas which include:
- don’t know where to start and what to buy
- perception of affordability and barriers to entry
- nervous about compromising their lifestyle
I would like to share my years of property investing learning’s – and I started young (in my early 20’s) – I know what not to do and what really works.
Here is a sneak peak of some areas covered in my upcoming book:
A big part of people’s decision and why people don’t own more property is predominantly , the lifestyle we choose. Quite often we’re always looking and thinking we would like another big trip, or what about a new car, upsizing in house, or upgrading neighbourhood. And then there are rising expenses, education and the list goes on – all these factors are making it harder to save.
However we don’t necessarily need to give up on all these sacrifices to further ourselves financially, it just takes some discipline but also the know-how to invest successfully. To attempt property investing wisely the key is to have a plan, and good advice. Factor in the current lifestyle to ensure it is not compromised. Then look to investments which fit financially, that have good capital growth prospects, and then sit and reap the rewards.
Where to start & What to buy
The 2 most commonly asked questions — Where does one start ? Most people tend to buy in a 5-10km radius of where they live or grew up. That is because it’s what they know and are comfortable with. They fear the unknown of investing in an area unknown to them – of course.
Depending on where you live and the value of properties, you may find difficulty in ever buying one property let alone multiple properties. Then, an open mind when coming to investing is a must. The reason why we purchase investment properties is (for a minimum 5–10 year period as historically properties tend to double every 10 years) our investment and wealth grows.
The decision in where do I start let alone what and where do I buy is a daunting one for most. As a result a lot of people will put in the too-hard basket and delay the decision to jump into the market. Have you ever heard this ? .…..” I wish I had of bought in that area earlier, the prices have just gone crazy now” I can see this happening in Blacktown.
Besides from considering properties outside the comfort zone the other task is actually knowing what is the right property to purchase in Seven Hills. Is it going to be off the plan; or an established property; or something that is cash flow positive; or is the property going to negative pre tax depreciation? And then the logistics kick in of how are we going to purchase it. This checklist is a usual tool that I use regularly to work through what the next investment will be. So, when looking at the decision matrix with all these
variable – then it is no wonder many people resist the urge to invest in property
Generally, most people consider the lack of cash deposit to be a hurdle. A lot of this really comes back to not knowing where to start, what to buy and looking within a 5-10km radius of where you live or grew up. You don’t need $400-500k plus to get into the property market once again. By waiting and doing so you may be forgoing a substantial amount of upside in the wider property market. There are abundant amount of properties in all different states that are attainable and feasible from at least $100-150k upwards.
Now in some of these places or properties you aren’t necessarily going to get massive capital growth potentially but what you have to keep in mind is that the majority of these properties would tend to be cash flow positive. So, the property will be paying itself off over time. You can quite easily build up a significant cash producing portfolio within a space of years and later on down the track you can look at diversifying into the higher priced properties if you wish to do so.
Just because you may not live or like the particular area that you’re purchasing in doesn’t mean someone else doesn’t.
Here are a few examples of what is available and possible in the Western Suburbs area that we have helped secure for our property investment clients which included a 1 bedroom unit in Blacktown off the plan that had a purchase price of $330,000 is now worth $340,000 and it has a rent of $400 per week.
If you were to borrow 80% of the value it would be roughly $56 per week cash flow positive before depreciation so not a bad investment and if you were able to borrow the full amount then is slightly cash flow negative before depreciation assuming 6% interest rate and is a gross rental yield of 6.3%.
Another property was a 2 bedroom unit in Parramatta, happened to be dual key and had purchase price of $579,000 and rent of $720 per week
If you were to borrow 80% of the value it would be roughly $147 per week cash flow positive before depreciation so a very good investment and if you were able to borrow the full amount then is still cash flow positive before depreciation assuming 6% interest rate and is a gross rental yield of 6.43%.
There are a number of other properties in areas in the Western Suburbs in which I’m helping people invest in the range from $170,000 to $330,000 and receiving rents from $240 to $400 per week and even up to $600 if can add a 1 bedroom granny flat which doesn’t need DA approval for as little as $55k.
In essence we have been able to find properties and opportunities where it would cost around $360,000 on the higher side and achieve $550–600 per week rent.
There are a number of areas in the West that we are actively involved in and looking at and one of the suburbs included in our search is Seven Hills. At the moment there is a lot of activity happening in Seven Hills with many properties under offer or sold within weeks of being on market. Things I like about Seven Hills include proximity to trains and transport as well as land size and value for money. Trying to get a property in Seven Hills at the moment you will need to be quick.
Never buy on emotion – buy on the numbers stacking up.
To conclude — start low, work inside your affordability range, get expert advice, and seek properties which will provide future capital growth and cashflow to get you into your next property.
About Anjay Zazulak
The sole reason for Aussie Property Brokers and my objective now over the next 5–10 years is to help others create a life of financial independence and happiness through building and growing their own personal property portfolios through quality driven investment property purchases nationwide.
Having purchased over 20 properties in 3 different countries including NZ, Australia & Japan I have the experience and research to help many people, even with a low deposit, to get their start in property. Budgets can start as low as $100,000 for property purchases.
Aussie Property Brokers — Property Matchmakers
1300 457 248