Hi all
HOw would you go about selecting a regional area to invest in?
I’ve found some good properties in a regional area and there is currently a tenant there for 11 months more. The house is in the price range and fits the 11 second rules. The real estate agent who sells the property said he’s a good tenant with spotless rental record.
The only concern for me is that my friend who used to live there reckoned it’s not a good area to invest in as it’s a predominantly farming area, it’s a small town (around 3,000 people), many state housing, a lot of people on rent assistance.
However, on the other hand, the real estate agent said there is currently a rental shortage in the area.
When I looked up government figures on the region the population is decreasing and projected to head that way.
Would you invest in the area?
What criteria will you consider when selecting a region to invest in?
I’d be grateful for your opinions.
Hi Nguyent
it is hard to give you anything helpful but some comments for you. The Govt figures aren’t always accurate. For instance the Govt said Hobart would decline in population however it is actually starting to grow. However you do need to be careful with smaller towns and everyone is different. if its in Vic or SA PM me and i’ll see if i can add some extra insight , (you don’t want to post on the forum where it is as it could create too much competition.
I’d start by talking to independant property managers in the town and ask about the rental demand and price. also go to the town and find out what is happening locally.
I think there are still opportunities if you are carefulregards westan
friends are the first to say dont, but when you make money they say gee you were lucky werent you.
Dont listen to the friend, listen to the smart people in here that share their info or can find you those elusive bargains.
If the place stacks up, bugger the friend, it is not his money and you and only you can sign the contract. What the hell are you waiting for.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
Thank you for your response.
I agree that talking with people on the ground would probably be my best bet.
I still have questions though:
[confused2]
What do you mean by “independent property manager”?Would you still look at the official figures though like population and employment etc as I wouldn’t want to invest in a town that’s disappearing and most people are there on Government’s assistance.
Hi Homer,
An independent property manager is a manager who is not attached to the selling agent – if they are in the same office it is more likely they will give you a ‘best case’ rental scenario rather than the reality.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
My concern is: would all property managers in the area give me ‘best case scenario’ though? If they told me rental market was difficult in the area they’d put themselves out of job.
My point is: how would property managers be objective and independent as they do have a vested interest in the real estate market in the area.
Hi Homer,
You still need to do the required background research about the area and that will tell you things about population movements, employment prospects, industry and investment, infrastructure and so on – but it is the property managers who have their finger on the pulse when it comes to knowing what properties are getting as rentals.
And someone in a competing agency only has the property management rights to gain – the office is not going to get any commision for the sale so in essence their figures are more likely to be closer to reality.
Having said that I have seen written rent appraisals for the same property that do differ, by in some cases, significant amounts – in these instances always use the worse case figure when doing calculations.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Hi,
Perhaps you could start by getting rental lists from the property managers in the town. See for yourself how many vacant houses there are at the moment.
Just be careful if the town is way way out, in places like the wimmera, (west of Horsham) etc where drought is still severley affecting many towns.
If the tenant moves out, do you think the house is likely to rent again easily?
Sometimes you have to go with your “gut” feeling.
Good luck,
Del
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