Hi All,
I have found a number of positive cash flow properties (exceed the 11 second rule, and the rest of the numbers stack up too) in a small country town in WA.
The town, Manjimup, is about 3 hours south of Perth, in the heart of the Karri Forests. It is a pleasant town, not overly pretty in itself. It has a number of nationwide franchises (retravision, chicken treat, target), 3-4 banks, a couple of schools and a TAFE. Population is about 4500. Vacany rates are stated as 1-2% but by the numbers of properties on agents books I would say 3-5%
All the above sounds good to me, but there are some downsides…
The town has been heavily reliant on the (now decimated) native timber industry in the past. While plantations are on the rise, there is still a large employment shortfall.
There are few new industries on the horizon.
Population growth is static at best.
Capital growth on property is also static, if not a little bit negative.
My very (ultra?)conservative cash on cash returns (pre tax) are about 4.5%.
The vendor has agreed that as a condition of any potential sale, a tenant must be found who will give a signed 1 year minimum lease. Is this good to have and how binding is it?
Thank you for your help and knowledge.
I saw an ad for free blocks of land, ready to build, in Bruce Rock, a couple of months ago.
I saw a house, old but liveable, on a 1000 square metres advertised for 5K in Kondinin, 2 weeks ago. The timber alone in the house would be worth at least 4K.
There is an investor group that does wraps for houses if you are heading to Kambalda or Boulder. Most houses are under 100K.
So if you are interested, they are definitely out there.
manjimup, love the place, i was born there and most of one side of my family still live there, not that my word is anything to go by, but here is my opinion on manji…….
the timber industry is over and there are a lot of places to sell in town and surrouding country areas, although the returns can be good, most of the young people (future tenants) are moving to bunbury or the city for better job prospects (this info from my cousin (21) whose friends have all done and she is about to herself)
great place but unfortunately i think rental vacancy could be a BIG issue there.
i may be wrong
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