Hi I am considering buying 1 bedroom apartment as first home buyer in Sydney west and rent it out after 6 months as I will be away. I have 5% deposit. How secure is to go into property market now as its cooled down maybe I can be bankrupt and not find tenants.

Dear Michelle

The strategy to move out after 6 months is perfectly legal,however as an investor you must become aware thaty you should consider vacancy of 20% as a part of the cash flow. The security of the property market may or may not be there,however if you are a young first home buyer, then you will live through a cycle , but most importantly you will have a roof over your head at retirement. Thats the main purpose of property to give you shelter.

Regards

Madhu

Hi Michelle,
I think that there are much better options for you. I would recommend you speak with a number of professionals and take a trusted friend or relative with you.
I don’t know the cash flow numbers on a property in Sydney’s west but I would expect that you would have to contribute $200-$300 per week on top of the rent to pay the mortgage. Plus any period of vacancy, maintenance and other holding expenses and body corporate fees.
If this is likely to be a strain on your finances then I would steer clear and just keep saving for a bit longer
Best of luck with your decisions
Regards
Scott

Hi Michelle,

Excellent! I don’t know anybody that has wished they had waited to invest in the property market.
That being said your primary motivation purchase should be very clear with measurable outcomes that you can review on an ongoing basis so you know if your investment is a “good one“ or a bad one.

With what you’re proposing here there are definitely some benefits available yet the cost of property in Sydney is very high at the moment yet softening slowly.

From a security point of view. Meaning the property you are purchasing and the subsequent appetite lenders may have for one bedroom unit in Sydney is very Small. That could restrict the loan value as well as the loan size. It would probably limit the lenders you have available.
Traditionally one bedroom apartments are a little about 50 m² that many lenders will not let you borrow more than 95’
That being said , For a lesser dollar value, just outside of sydney, Newcastle or Wollongong you could probably buy a house and land package that is brand-new where the rent could cover most of the financing costs for even more and provide capital growth, as in the property value going up, Giving you future long-term financial stability.
We could also open the door for somebody else to pay your home loan off for you and maybe hope you and your accountant minimise your taxable income.

Everybody has their own motivation for purchasing properties and the cornerstone IUs is to have absolute clarity around what you want to achieve from it.

It would definitely be worth us having a conversation and doing some comparisons so you can make a well-informed, commercial decision that is based on factual numbers About what the best pathway forward would all could be.

Thanks for asking such a great question, as many of my clients are asking the same thing right now.

Kind regards

Craig