All Topics / General Property / Regional Victoria, Who’s making money?

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  • Profile photo of madeinitalymadeinitaly
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    @madeinitaly
    Join Date: 2007
    Post Count: 47

    I have found many areas in regional Victoria with good rental yields 6-8%. But I am unsure on the vacancy rates of general regional Victoria and especially unsure about future capital growth. Wondering if anyone has experience in this sector of the market or has some more inspirational stories to tell. Furthermore which ones have been the telltales that pusched you in investing in those area?
    Happy investment to everybody
    Andy

    Profile photo of beaniemonsterbeaniemonster
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    @beaniemonster
    Join Date: 2006
    Post Count: 48

    Hi Andy,

    I have several investments in Regional Victoria.  It depends what YOU mean by "Regional",  Some people would consider only regional cities of 40,000 or more people, some consider regional 10,000.  I grew up in a town of about 14,000 people and for 13yrs i have lived in Melbourne.  All of my friends in Melbourne would never invest in regional – WHY? because they have never even taken a drive into the country and wouldn't know what to look for.  I believe in knowing your market well and my rentals have never had a day vacant.  I buy in the middle price bracket and only buy something that can be rented straight away (maybe spend $200 for minor cosmetics) and with bigger land than the average block so i can build on later.

    It depends what type of investor you want to be, i wouldn't personally live in this area again or live in any of the properties i own but that doesn't mean they aren't going to make me money.

    I must admit i have my parents to help out with any minor problems,  and i bought most of them sight unseen as my parents looked for me and i trust their judgement.  My first investment was a lovely 2bd unit (1 of 2) overlooking a golf course and i haven't had one problem with it or the tenant.  my return is 6.5%.  That gave me the confidence to know i could do this and i kept hounding the estate agents until i found another good deal. (this was only back in November last year that i started)

    What area/s were you thinkiing about? I bet there are plenty of people here who can help further.  I believe regional towns can work for you if you know the areas well (as long as infrastructure is going in and as long as they don't have a declining population)

    Melbourne will start pricing people out and some people will have no choice but to consider regional towns.

    hope this helps a little,

    Profile photo of v8ghiav8ghia
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    @v8ghia
    Join Date: 2005
    Post Count: 871
    beaniemonster wrote:

    I have several investments in Regional Victoria.  It depends what YOU mean by "Regional",  ,

    Hi Beaniemonster. Along those lines, any thoughts on the following as far as the actual areas and from a property investing view?
    COLAC
    STAWELL
    ARARAT
    HAMILTON
    MARYBOROUGH

    Cheers.

    PS Won't tell you what best forgotton part of rural Vic I spent most of my childhood in – scarred me for life..

    Profile photo of PursefattenerPursefattener
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    @pursefattener
    Join Date: 2004
    Post Count: 217

    Hello Andy

    I've been investing in regional Victoria for quite a few years . I have only invested in the towns within my own region just because I find it convenient since I am tied down so much with my business , family commitments etc .

    Towns I have property investments in are Warrnambool , Camperdown and Mortlake as well as farmland in the area . Warrnambool in particular is growing quite steadily and the rental market is fairly tight . Origin energy are planning a gas fired power station near Mortlake which will no doubt help the general area .

    Perhaps Wonthaggi might be worth a look over in Gippsland as the Desalination plant will have an effect . I have never been there…..

    I like the prospects for  Mortlake within my own area .  Hope that helps

    Shawn

    Profile photo of beaniemonsterbeaniemonster
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    @beaniemonster
    Join Date: 2006
    Post Count: 48

    Okay I'll tell you…. lol, Maryborough!!!!! Yep, most people will be thinking WHERE?  It's 45mins to Bendigo and 45 Mins to Ballarat.  It's right in the heart of the Goldfields and i didn't primarily invest there because i knew the area.. but it helped a lot.  I missed the boom in 2003, but since then a new 20mill dollar Prep-Y12 school has opened, an ABC Childcare centre, a KFC, a new company about to start operating at the old Nestle site and in 2yrs a new shopping centre with a coles and kmart (over 300 jobs will be created) who both signed on 20yr leases (not the usual 15).  We have targeted this place to cater for the aging population and intend on building units in the lower to mid price range.  There is talk that the council would like to open up the railway line again for a passenger train (but i think it's doubtful).

    I have purchased a 2 acre block directly opposite the new school with a 3bd house that was rented from day one for $170pw (and it isn't exactly 5 star).  I have an old heritage house near the CBD which we are going to renovate and use as a Short term rental or weekender for people (due to the farmers markets in Talbot and Avoca) and my property manager wants me to rent it for $120pw as is (but i wouldn't, i don't think it is tentantable!!) they are that desperate for rentals.  It came with a block next door which we will put 2 units on and i would anticipate $170-190pw (2bds).

    I think if you buy into regional areas…. you should never look at selling.  You won't make CG like Capital cities so there is no point selling (unless 20yrs go by).  Every house we have bought there has been clean and well maintained and tenants have all been good as it is a small town and word goes around if you're a bad tenant.  Yes it is a low employment area, two of my tenants are single mothers on benefits and the condition of their leases are they pay automatically via Centrepay, so i am guaranteed my rent.

    I have never talked up this town to anyone and i'm not trying to do that here.  I think each to their own and as long as you know your market and aren't outlaying a lot of cash, regional towns can be great.  Especially if you diversify.  PM me if you need advice on this area, i know the market pretty well.

    happy hunting!

    Profile photo of jagwilljagwill
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    @jagwill
    Join Date: 2004
    Post Count: 9

    We've bought properties in several regional areas across Australia. Some in very small towns (less than 8,000 population) and have had good returns both income and growth.  One property we bought 2 years ago, in Charters Towers, QLD, for $68,000 has recently been valued at $170,000.  The real estate agent told us not to sell because there is heaps more growth in the area. Another we bought in Norseman, WA has doubled in value in the last two years and is giving us an income of over $3,000 per annum as well.

    If you do your research and find the right areas the growth rates (%ages) are just as good as the big cities but without the big capital outlays required with city property.  We've invested in Horsham and Ararat and both have experience good growth.

    regards John

    Profile photo of madeinitalymadeinitaly
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    @madeinitaly
    Join Date: 2007
    Post Count: 47

    Thank you guys for your golden words!
    I have been looking in places like Murtoa, Warraknabeal, Moe, Morwell and Traralgon. All in 6%+ ROI. I will definitely looking into the area you guys suggested. I have 100k available and in the other forum i have started (It's time to start. I need genuine advice!) many people adviced me to play safe and invest in a couple of property around 200k in Melbourne area mainly for CG. However I think that with that cash I could buy around 6 properties around 100k in regional areas (over 30.000 inhabitants) almost neutrally geared. My goal is to retire in 10 years on a decent income. My research in these regional town has shown a decrease in population growth over the years and this is a bit scary. For example coal mines in South Gippsland area bring a lot of business however if the green party will have an impact on the future election they (the mines) could be limited in operations and reduce the economic feasiblity of those places (far fetched and just food for thoughts).
    When it comes to purchasing in Country areas I intend to keep them for the long haul unless I would buy development sites.
    By the way I am first time investor.
    What you guys think?
    Cheers
    Andy

    Profile photo of aussieinvestoraussieinvestor
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    @aussieinvestor
    Join Date: 2003
    Post Count: 67

    Hi Andy

    I may be of some assistance if you are looking at the Latrobe Valley.  I am the Officer in Charge of one of the Fire Stations and know the area quite intimately, not only from an investing perspective but also through extensive networks with key players due to my role within the community.  I can give you a lot of valuable information on the Valley (without disclosing priveledged nor commercial-in-confidence information), that will assist you in deciding whether the Valley is for you.

    Although most of my investments are in the USA, I have recently purchased in the Valley (with a hassle-free settlement two weeks ago) and I'm quite happy to refer you to the REAs, mortgage broker and legal firm I used.  They are all nice local country people and are extremely helpful.

    There is a cost involved however – a cappuccino and chat at my favourite cafe.

    If you're interested, send me an email at [email protected] and I'll send you my mobile number.

    madeinitaly wrote:

    I am at a loss and worst thing I trust NOBODY!

    Mate, if you can't trust a firey, then who can you trust!!!

    Cheers

    Peter

    aussieinvestor | Digital Revenue Pty Ltd
    http://appliancewhiz.com
    Email Me

    Profile photo of bennidobennido
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    @bennido
    Join Date: 2004
    Post Count: 195
    v8ghia wrote:
    Hi Beaniemonster. Along those lines, any thoughts on the following as far as the actual areas and from a property investing view?
    COLAC
    STAWELL
    ARARAT
    HAMILTON
    MARYBOROUGH

    Cheers.

    PS Won't tell you what best forgotton part of rural Vic I spent most of my childhood in – scarred me for life..

    I have a few IPs in the Horsham / Ararat area bought over the past 4 years. All are +ve geared as I bought them (so no reno work needed on my part) and almost 100% rented out since I bought them.

    Capital growth is not flash at about only 5% per year approx. But I bought them to have some income generating assets so that's fine for me.

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