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Hi Russ,
You sound like a local do you live in or near geraldton? I have done my homework on Geraldton and am well aware of the reputation surrounding some of these suburbs. This is why I took the time to contact every real estate agency in town and most importantly the ministry of housing. The message I got from them was that they will be selling off many homes over the next 3 to 4 years in places like rangeway , utakurra , karloo. Have spoken to numerous property managers, and read everything about Geraldton I could get my hands on.One of the real estate agents summed it up for me. He mentioned a street in Rangeway called Kenny crescent. He said 12 months ago it was worse than Beirut , a real war zone. In the last 12 months the ministry has sold off the homes there and that is now considered a good street. 12 months ago you could have bought a brick and tile home for $55 to $65k there. Now they are selling for just under the 100k.
I saw this as an OPPORTUNITY and in 1 instance bought a home in what was then considered a BAD STREET with the knowedge that within 12 months only 1 in 12 homes will be occupied by dept of housing in that street. I organised a 6 month settlement. Signed contracts in jan for $63,000 (3 br brick and tile home , around 20 years old fully renovated) well below replacement value. Have not yet settled on this home (due to settle at the end of the month) In the meantime the “problem” neighbours have been vacated and those homes sold off, some to owner occupiers. Log onto realestate.com and see how many 3br brick and tile homes you can find in geraldton for $63k , you will be struggling to find anything under $90k
My decision to buy in these towns was based on the following.
1)Brick and tile homes available well below replacement cost
2)Coastal town
3)Prices over the last 10 years have been flat so Geraldton in my opinion is due for its turn of the property cycle price rise. I see less risk and more opportunity in the short term in buying into suburbs that have not seen phenomenal price increases in the last few years. – This is where I believe the greatest risk is.(short term)
4) the money being invested in Geraldton, beautifying of foreshore, ,tafe, hospital, transport link etc
5)selling off of ministry homes
6)geraldton featured in my business magazine (1 of the top 25 boom towns may 2004)
7)nuetral cashflow (on my purchase prices)with room for capital growth. There is “insurance protection” for me in that the purchase price in relation to the rental return has a healthy balance. This to me protects the value from falling.
8)I am kicking myself for not buying in Tasmania 12 months ago when you could buy brick and tile homes in the not so great areas for around 70k , they are now well over the 100kAt the end of the day everybody has different investment goals and opinions of what is an opportunity and what is not. Successful investing is all about realising that something is an opportunity and acting on it.
A few years ago I purchased a few properties in Redcliffe QLD (late 2000) for around the 100k. I had people at work tell me Redcliffe is a dump I used to live there…blah blah blah (These people don´t own any property mind you) Also when I was booking my ticket to fly to redcliffe the lady selling me the airfare had something negative to say about investing in QLD (she was from QLD, and that redcliffe was a dump – it used to have quite a reputation) i have just sold one of these homes purchased for $108,500 for $283,500. I have kept the other 2 I own there.
Anyway I was just starting out then and it made business sense to me to buy there (the figures stacked up, it was a coastal town, predicted to boom in many articles I read) so I went with it.Thanks to that decision I now have 17 properties. I can only encourage everyone to do their own research and make there own decisions and not listen to your brother-in law, friend etc that owns nothing. Read everything you can, talk to as many successful people as you can and educate yourself.
In response to your query about checcking out the propeties yes my best friend had a look at them for me as she went to inspect some of her own and the feedback was all good. I know have the confidence to invest without physically having to drive by each property I buy although it is comforting that she inspected them for me.
Russ , would love to hear more information about the indigenous comment you made in your post.
regards,
K.I have recently purchased 9 properties in geraldton ranging from 63,000 to 82,000. They are all tenanted except for 1 that settles in 3 weeks. They are all nuetrally geared which I am happy with and prices are rising. I have invested in rangeway, spalding, karloo and beachlands. The not so great areas are changing as the department of housing sells off many of their homes. In some streets there will be no more than 1 in 12 homes as housing commission. Where else in australia can you find coastal property in brick for less than 100k that pays for itself?
