Regional/Country property predictions

I have purchased a property in Mudgee NSW in June 2001 2×3 bedroom houses on a 850 sq meter block.

I paid $242500
They rent for $200 and $185 ( I put air-conditioning in one so far )
The value now is in excess of $400000

Mudgee was among the top 10 in real estate growth last year ( I think in rural NSW )

Mudgee has a strong economy linked to Mining and Wine making industry.

I think Wellington NSW will soon be a good place to invest because;

There will be a prison built there due for completion around the end of 2005, The staff will no doubt require housing and as this type of employer seems to turnover staff not all of them will be buying as an ppr.

As for Victoria I cant say too much but generally look for a town or city with a good industrial employment history.

Is there a more than one large employer there ?

Has real estate been growing there consistently for more than the last three years?

Most importantly get to know the values in the market you intend to invest in.

How long does it take to sell a house there? The faster the better!

“My first post in this forum”

Regards
Age

Buy new!
Never Sell!

So there’s “many” positive cashflow properties available is there? I assume you ain’t talking about Australia here, because while they do exist, they’re hardly plentiful, and where they are located is sometimes questionable in terms of making an investment…

Cheers
r

You assume wrong richmond I am talking Australia and yes ive been able to find “many” cashflow properties in country towns.How ever you are right saying some of these are questionable for investing, actually some are very questionable but I have based my stradigie (theres that spell checker again ) on cash flow . So for me personally my main objective is to keep the ip tennanted, and if I get capital gains then that is a bonus.[cigar]
regards Risky

If you want the rainbow youve got to put up with the rain!

I also think there are a lot of factors at play…

One that hasn’t come up yet is people’s desire to live in country areas. I think it is underestimated at times that there is demand because people like the country and want there kids to grow up that way…. and also IT is getting so good that… well frankly who needs to live in the city???

Dont get me wrong I live in the city… but I know where I would rather live…. more like the fringe where there is acerage but still a reasonable travelling distance to the city….

I have an employer that I could move to any centre ( say 10000k+) i like in australia and that’s not because I’m the bees knees at my job but the IT is good enough to make it happen and i could do the same job I’m doing in the city…

taz

Hi Risky,

I like the look of Geraldton… but not Collie, Wagin or Esperance… yeah they’re regional service towns for surrounding farming districts, but not overly enticing for my goals… like I said horses for courses. Geraldton though looks good… growing population, diverse industry base etc. Only problem is that those 65k houses don’t necessarily get $130 pw + in rent… How far down the track are you with pursuing your strategy?

Cheers
r

perfect sense risky, good luck with it all

holdencommodore :o)

I agree with some of the comments others have made about the possibility of entering the market on an average income. It’s just not possible to do that in many cities of Australia now, and rental return in regionals/towns is *generally* higher than in cities Buying regional is a viable option post-boom.

Check your fundamentals though about population stability/decline, any industry in the area and will it remain, is it a flood area etc etc. Think about 2004- not 1999- about possibilities of capital gain. It’s a thought to find areas that are still “undervalued” as in, didn’t freak out/doubled/tripled in price over the last few years, because you’ll be pricing yourself out of the market.

Most media articles and experts (residex, commsec, REI’s etc) have expected prices to flatten somewhat. So you might really be looking to achieve max rental gain, and get your properties paid off by the tenant/tax dude, rather than expecting CG in the near future, although I am not sure the boom is over YET :o))

taz, I know the country is lovely but there’s also realities borne out by the ABS and others- people are moving to cities and out of rural areas. This has been happening for at least a decade as young people move away to find empoloyment and training opportunities. Baby oomers/retirees are more likely to move to the coast rather than a <5000 rural town. People demand services these days- particularly older people- hospitals, doctors, community centres etc.

holdencommodore, I think many regional towns (however one defines them- I’d probably think it was easily above 25,000) have far fewer CF+ since the boom. I reckon you’ll have to go to small towns to find them. Even places like geraldton have mostly fringe areas that have decent rental returns these days.

Best of luck with it!! Regional areas are great to get your foot in the door!!

kay henry

I have to agree with you, Rugby :+P

Russ, everything’s global with the internet. You can find out pretty much everything about a location on the internet- *much* more than one would have been able to find out ten years ago. I check out Council Plans, population demographics, media on the area, local newspapers, health reports, employment statistics, rental returns, flood details, fireant presence, soil salinity, ABS data- everything basically, on the net.

The last two IP’s I bought I didn;t see before I bought. And if we’re gonna refer to guru’s, Margaret Lomas said today she hasn;t seen 3 of her IP’s EVER. Really, though, it doesn;t matter what other people say- ultimately, it’s up to each person to do their own research. Research is essential. To me, going to the location is not. We all have our own strategies, and if they work, then it is up to each of us how we do it.

kay henry