I know there issomeone out there that phone me once about PI in Geraldton
I forgot your number
I Would like to talk to anyone investing in this town, discuss the in’s and out’s of it all
Glenn“I should be content to look at a mountain for what it is and not as a comment on my life” D. Ignatow
I think there is a few good buys left around there, but talk to the locals. I have a friend in Gero and he thinks that some of the areas (the ones with cf+ properties are, well, a bit ‘rough’ and have similar tenants. Research never hurt anyone.
Also, (and correct me if Im wrong) but I think the banks have a lower LVR here (60 – 70%)
Luke [cap]
devilcv8
thanks for your reply
I have found the person that phone me from other member, and have email them
but always willing to talk to anyone about PI in geraaldton
Glenn“I should be content to look at a mountain for what it is and not as a comment on my life” D. Ignatow
Hi Recoveryman
a friend of my brothers is staying with my brother at the moment comes from Geraldton if you want any local knowledge give me a call
regards westan
Originally posted by devilcv8:Also, (and correct me if Im wrong) but I think the banks have a lower LVR here (60 – 70%)
I had no probs getting 80% LVR there (in Sept 2003).
According to my PM the main rental demand at the moment is good quality family homes. These will not be cf+ as Geraldton is a low rent town. You’d be doing well to get 7%.
A few months ago I saw a 2br unit in a nice suburb for sale for about $60k. This was fully furnished and had been rented at $135pw.
11.7% yield – whooppee – that’s what IP dreams are made of!
I regard that as high rent for the area as you can rent a whole house (u/f) a stone’s throw away for less than that.
Then ust a few days ago I heard that (presumably) the new buyer was desperately hoping to find a tenant to pay $120pw for the place.
That’s 10.4% gross rtn, but if you look at
(a) the 1% extra the PM’s charge for fully furnished,(b) body corporate fees, (c) the high proportional council rates on small units, (d) the likely transience of tenants of f/f units
your cashflow will be soon gobbled up and you will almost certainly NOT be +ve cf.There are previous threads in the archives about Geraldton. If you have any questions arising, just post them here.
Regards, Peter
Me here over in Geraldton… But I like keeping secrets…
All is correct about lower rents, but then again, the demand is quite high for ‘good’ rentals. What I mean by that is in areas that are a bit better.
They are still flushing out a few suburbs of the homeswest housing…
Steph.[biggrin]Success is 1% inspiration and 99% perspiration.
Screamin
What are your thoughts on the cheaper houses, say 60 – 80k and the suburbs they are in?
Luke [cap]
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?
Wow.9 homes in those areas.I hope you looked at them first.I toured through there a while ago and reckon I was lucky to get out alive.Some of those streets were like a war zone.I read the local police report for Geraldton each week and I wouldnt live there for the fear of being broken into on a weekly basis.I go shopping there once a fortnight and that is enough for me.
I heard that the government is bringing more indigenous families into the area as it is less expensive for the different departments if they can service all their needs in the one area.
I heard this from a JP who resides out of town.
Best of luck guys.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.Hi there,
I’m one of the many people kicking themselves for not buying in Geraldton.Researched it 12 months ago…. never liked Geraldton. As many people from Perth would say, one of the places you drive past on your way to Kalbarri but never stop there. Mistake…
Trying to look outside the square now.
[exhappy]Like Mortgage Advisor said these areas get sold on to low income families and never really improve.
I live 65 km,s south of Geraldton and go there every fortnight to do my shopping.
I have looked at buying investments there but could not find anything that I would be happy with.
There are better areas if you have a few more dollars to spend.
As for being a coastal town I would personally have to say it is one of the worst I have come across.
There is a reason why people drive through it to get to Kalbarri.
Because it doesnt offer anything.
A walk through town and a glance at all the empty shops and business premises will tell its own story.
A drive through the industrial areas will show the same thing.Most properties in the industrial area have dropped in value and a lot stand empty.
If you want to invest in a coastal location then go south of Perth to Mandurah or Bunbury.
Prices are still rising in these areas and will continue to do so.
Russ.Hi
I have invested in Geradlton and visited the place
and was impress
I invested in tasmainia 12 moths ago and Geradlton has the same vibe
all the locals could not see what is in front of them
I brought in kenndy crs and if you think that was like a war zone, please it was no were near as bad as some streets in redfern
I think the fact if is on the coast and all the money being spend by govt is a real indication that Geraldton is going to improve a lot more before people relise there is an winning right under their feet
I am still buying in Geraldton beacause i belive there is still bargins to be had, I surpose time will tell, but the same gut feeling and research that I have used to good effect in the past tells me there is still more upward movement there
glenn“I should be content to look at a mountain for what it is and not as a comment on my life” D. Ignatow
recoveryman,
I am still buying there also. I have 2 more places under contract (again with a delayed settlement)
What has been your experience with the Tasmanian property? I am kicking myself for not buying there.
k.
Well guys all I can say is go for it.
I have lived here for over 40 years and I would be putting my money elsewhere.But hey if you like the bargains why not try Mullewa.You can get a lovely 3 bed there for 25k less than an hours drive from Geraldton.And a great return of $120 p/w.You just have to find someone to insure it for you.This is one of the areas they are trying to clean up.By moving the families to Geraldton.
So they can provide them with better services.
Have fun guys.
Russ.Russ,
Appreciate you live locally and see things from a different perspeective.
Can I ask where you are investing at the moment?
From the outside looking in, to me it looks like the Government, Council etc are trying to *inject* money into Geraldton through the port etc etc and ‘get things moving’ in the town..??
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorGeez Russ… You make it sound like GEro is a total and utter dump!!! What a crock of Sh*T!!!! I’ll take Geraldton over Perth any day mate… Coming from someone who has lived in the city her whole life…
Yes there are some issues, but if you bothered to look on the local council website you will see that there are some really good long term plans being implemented. I managed to have a bit of time with teh Mayor when I first arrived as she was welcoming the new teaching staff to GEraldton. (Very nice of her…)
Things are happening here and I can tell you what, what other town or city do you get three major resources happening? Mining, fishing and farming!!??? Plus we have just scored the contract to send iron ore to china.
Don’t under-estimate the coastal city. I agree, I thought gero was a dump and just a place to “pass through to get to Kalbarri”, but my thoughts have very much changed since living here.
I’ve lived in Harlesden in London which has the worst instance of gun crime in the whole of the UK, so Geraldton is not that bad… As to Kenny Cres… I still don’t like that area… Bad vibes…
Steph.
Success is 1% inspiration and 99% perspiration.
Steph,
I think those of us investing understand that areas like Kenny Cres (Rangeway ) are the lower socio-economic area of town. In all locations there has to be the bottom end of town. Not everyone can live in the good parts of town.
Obviously there are better areas in Geralton , Mt Tarcoola, Mahomets, Bluff Point etc….and as an investor I accept that.
The way I see it Geraldton as a town is expanding and a lot of funds are being invested there. When the good areas rise in value the price rises will flow onto the outer areas. There will always be a relationship between the price of a house in the good suburb compared to the price of the outer suburbs.
If I lived in Geraldton I know that I would choose to live somewhere like Tarcoola Beach and I can afford to. I am however not buying to live there but rather as an investment and as I have a large portfolio I neeed to manage my cashflow so areas like Rmngeway are right for me.
Would love to hear more from other locals….
When I bought in Geraldton (Sept 2003) my budget permitted me either a house in Rangeway/Spalding or a 1980s brick duplex half in Bluff Pt (7 min walk to beach and near all other facilities).
Neither would have been cashflow positive. At the time yields in ‘good’ areas like were commonly around 6-7% and maybe 8-9% in Rangeway or Spalding. Thus both would have been negatively geared.
Already having a higher yielding property (not in Geraldton) I chose the duplex half in the better suburb. Even back then the 8.3% yield stuck out as being better than for other properties in ‘good’ suburbs.
Yes it is negatively geared, but the advantages outweighed this (i. good stable tenant, ii. excellent suburb, iii. no body corp fees, iv. highly lettable according to local PMs, v. higher cap growth potential than Rangeway/Spalding).
To date I have not been disappointed and the property has been a pleasure to own!
The alternative, of a Rangeway house returning (maybe) 9% gross didn’t appeal so much. Even though there are some quite nice streets in Rangeway (eg Tuart St behind the shops), I would have wanted 10-11% yield and a brick property to compensate. That I couldn’t find when I was there, but those before me who did (around 2002/early 2003) have done well provided they had a good tenant.
Also my thinking at the time was that the price differential between properties in the ‘better’ areas and in the ‘worse’ areas was quite small when I visited. Since then investors targetting the cheaper areas would have made the difference even less, as Rangeway & Spalding prices rise.
But long-term, as interstate investors stop buying as yields in Geraldton drop to fairly ordinary levels (ie 5-6%), I think the differential between the better and worse suburbs will increase, with low capital growth in Rangeway/Spalding and higher growth in areas like Bluff Pt, Tarcoola Bch & Mahomets.
Rgds,
Peter
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