I`ll give one tip for those starting out, I just bought a home in Rockhampton for $65,000, good home, great street, no flood problems, already tenanted for $130 week, the previous owners paid $68,000 ten yrs ago.
I had driven up the coast for a couple of days to find two properties and when I got to Rocky it was like a time warp, I got that feeling you get when you first find out your home has doubled in value, many, many homes for around $70,000, and only 20 minutes to Yeppoon on the coast which is booming!.
I remember Dolf De Roos said something along the lines, he drives along and sees 20,40 or $50,000 just lying on the sidewalk, yet others drive right by, I believe this is the case with Rocky right now.
One more piece of advise, I`ll save you the trouble, forget Mt Morgan imo.Just be very careful, in buyin property in Rockhampton in flood zone areas. Have looked at many, yet been discourage and turned off from purchasing properties in flood zone areas.
Will agree stay away from Mt Morgan.
cheers,
s.i.sEven the flood area houses are only marginally cheaper than those that aren`t, at the end of the day if Rocky doubles it will make very little difference.
I personally stayed away from those because I could, but right now I think if I had the money I`d buy up.Just becareful with tempation, unless you are able to caculate and mitigate the risk, by selling the property just before a flood, or due to someone elses poor due dilligence.
Though temptation is what can make or break a person.
cheers,
s.i.sHi
Why invest in an area that has properties that have returned growth of $2k on a 10 year property worth $70k.
I dont understand. Lets say you buy 3 properties. Thats $210k. Come back in 10 yrs and it worth the bloody same. No time value of money no growth.
Buy a $210k unit now in Melbourne. Yes you can. Come back in 10 years its worth say $350k. I am being conservative.
Only one property to manage. Its gone up in value. I dont understand why you would even consider Rockie.
We are not playing monoply. We are not in the business to own the most properties. We are in the business to own the best properties with max. return
Cheers
Andrew
The best buys in Rocky were between the start of last year and the middle of last year… investors have been buying up big there for months and months. A lot of those ones that I’ve seen selling for 70k now sold for 50k in May/June.
Cheers
rps yack, I think that view’s a touch narrow minded… just because something hasn’t grown for 10 years doesn’t mean it won’t grow in the future, especially if you’ve done your homework. And I wouldn’t bet the house on decent capital growth just being a never ending phenomenon in the cities.
hi yack
can one really buy a unit in melb. for 210k?, and whats the rental return like for this kind of price?lymeng
yack/henry,
I see what you’re saying. CG is more important than positive gearing or cashflow, right? Some people think so, but others disagree. I think your prediction for melbourne unit growth is not what is written in the media (yes, i read the media- it’s an education, as much as a textbook is). I wouldn’t be going into a melby apartment unless it was *really* cheap.
Basically, you can either buy a really cheap house/unit (and hope the mine doesn’t close down!) and get some rental income… or you buy a place in the city – for more money- but it has to have some distinguishing features- views or something else to keep the value maintained.
The higher the price or CG the less the income- that’s basic economics. A million dollar house is not gonna get a $2 million rental return.
kay henry
Hi
I am not talking inner city. I am talking suburbs. I like near beach, schools and public transport.
In Mentone (surburb of Melb) you can still buy a 2 bed unit for $250k. It will be worth $300 to $350k in 10 years if history repeats itself. I am being conservative.
You cannot loose there.
I am sure there are other similar surburbs in Sydney, Brisbane etc,
Cheers
Andrew
Hi Andrew,
For what it might or might not add to the discussion, I reckon you’re far and away better off buying houses than units… land appreciates, buildings don’t.
Also, you said “if history repeats itself”… pretty big word that “if”… in terms of property, I would never bet the house on capital gains.
Cheers
rI just want to clear up my business is buy rehab sell within a year I do not know if I would hold any properties longterm, so the flooding issue I suppose is not as big an issue for me.
I like the prospects for quick profit over the next 1 to 2 yrs.Hi lymeng
Yes you can. I like Mentone and Frankston. Both on the Bay. Mentone is about 24 kms from city and Frankston is 45kms. Melburnians are only now apreciating the beach.
I grew up in Mentone and its is near beach, train station and some great schools. Mentone Boys and Girls Grammar (Shane Warne), St Bedes (Brad Hodge), Kilbreda and Mentone girls high. You can buy a two bed unit 2 mins walk to station, 5 mins to beach and 5 mins to all those schools for $250k. Rent is $195 a week.
Frankston is going to be good too. Its just before Mt Eliza and on the other side Seaford is booming. I used to lock the car as I drove through Seaford. Ok – its not that bad. Frankston has a new marina proposed still in planning and about $100m worth of other projects eg. new pictures, shopping centres. etc.
My advice is dont look at rural. Get one good investment property in similar surburbs in your city. Be patient. The turtle wins not the hare.
Cheers
Andrew
Hi Richmond
For what its worth Houses are better. But from a servicability perspective I did limit myself to units. If I had my time again I would have bought houses a few surburbs further down the bay.
Cheers
Andrew
Hi Andrew,
Jeez, 4% yield in suburbia is nothing to write home about mate… There’s no way you’d get me to buy at that yield… I’m not a seasoned property investor by any stretch, but there’s many I know who have been in for 20-25 years, and they would not touch a 4% yield…
By the way, Mentone’s a great area, but it’s been one of the biggest boomers in Melbourne over the last few years too… For what it’s worth, I reckon Frankston’s a good option too, just not at that crappy yield…
Cheers
rAndrew,
I think we’d ALL buy some houses in suburbs around the bay if we could have our time again [
] especially the last 5 years…Cheers and good night.
r
Hi Guys,
Food for thought… I purchased a block of 5 units in whoop whoop for $150,000 while my friend purchase one house in suburbia QLD near the beach for round the same price and round about the same time(beginning of last year). They have both doubled in value, so the capital gains is about the same. The difference is however is that my I get $430pw in rent and he gets $200pw in rent… So who in the end is better off?
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Tomorrow, you might wish you started today.
#####################Hi guys
Good point angie…
I went and sussed out some residex figures to quote… in the areas I bought 4 houses in Rockhampton, the median for the quarter June-Sept went up 24.1% in one area of Rocky (Allenstown $72,500 to $90,000), 33.4% in another area(Rockhampton City $59,200 to $79,000), 9.8% in another area (Park Avenue $97,000 to $106,500). This is in a quarter… three months… I’m just pointing it out for people who believe prices in regional centres don’t move much, if at all… Mind you, I haven’t had mine revalued from when I purchased, but I’m very confident they’ll all have risen…
Yack, I’d love to have bought in Ballarat when Steve was starting out… the CG would have been fantastic! There’s also a nationwide trend of people moving to regional areas… not Hicksville, but places like Ballarat, Bendigo, Townsville, Toowoomba etc… even though the prices are moving there, it’s nowhere near as expensive as buying in the city, and the infrastructure in those areas is great. Places like Mildura and Griffith are amongst the fastest growing regional centres in the country. You can still buy places in those areas with yields around 8.5% to 9.5%…
Cheers
rBy the way, the first house I bought was in Box Hill in Melbourne, in the middle of 1999, a three bedroomer for 220k, It was my PPOR, but would have rented for 300pw (this is before I was into property investing)… That’s a yield of around 7%. What a good buy… considering it was 12km to the city with great infrastructure.
I sold it for $345k in late 2001 to buy something else… the rent would have been around the same… so the yield is 4.5%… that’s a pretty big shortfall you have to make up if you’re negative gearing, I reckon, and it ruins your servicability unless you’re on a big wage…
And yes, sometimes I regret selling Box Hill, but there’s pros and cons with every decision, and we’ve been able to do some things that we never would have done had we not sold, so overall I’m comfortable with it. Sometimes it doesn’t hurt to take a profit…
Cheers
rHi Richmond, one of the rehabbers I recently bought is in Park Avenue, and I think we both know prices will continue to climb for a while yet, like I said I only bought mine a month ago and the previous owners paid more than I did…ten yrs ago!, there are still many bargains there.
I don’t want CG where I buy. I wanna pay at last year’s prices- not this year’s. CG is great for when you *own* a place.
richmond said:
“the median for the quarter June-Sept went up 24.1% in one area of Rocky (Allenstown $72,500 to $90,000), 33.4% in another area(Rockhampton City $59,200 to $79,000), 9.8% in another area (Park Avenue $97,000 to $106,500). This is in a quarter… three months…”
I’d prefer to pay the first price- the cheaper price- than pay the 3-months-later price. Gimme cheap property any day.
I always find it interesting when people say they want to buy in a place with large percentage (past) capital growth. If a place has 30% growth in 2003, then why buy it at those higher prices in 2004, when there’s no guarantee of *future* capital growth?
I think, when purchasing, we can look at places where there’s been no CG to speak of, but that meets our personal formula of what we’re looking for in terms of population, location, industry, price etc.
kay henry
] especially the last 5 years…
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