Forums / Property Investing / Creative Investing / Investing in low income areas

Viewing 7 posts - 41 through 47 (of 47 total)
  • Profile photo of Tracey BTracey B
    Participant
    @tracey-b
    Join Date: 2009
    Post Count: 158

    Jack good point re Adelaide.  I'm seriously looking at mining towns in Queensland rather than the Tassie ones for the reasons highlighted by others ealier in this thread – land tax is the main reason we're starting to look elsewhere.

    Having said that, while I find properties locally with good yields ie, 8% plus, my money will stay in Tassie.  We are not buying in high risk areas and our low income tenants are very reliable.  The most recent property we purchased is a beach-side property, tenants in place and showing better than 8%.  We bought under market value so have gained instantly, rather than leaving it to 'normal' capital growth.

    Keep looking, they're out there.
    Cheers,
    Tracey

    Profile photo of JT7JT7
    Member
    @jt7
    Join Date: 2010
    Post Count: 286
    Tracey B wrote:
    Jack good point re Adelaide.  I'm seriously looking at mining towns in Queensland rather than the Tassie ones for the reasons highlighted by others ealier in this thread – land tax is the main reason we're starting to look elsewhere.

    Having said that, while I find properties locally with good yields ie, 8% plus, my money will stay in Tassie.  We are not buying in high risk areas and our low income tenants are very reliable.  The most recent property we purchased is a beach-side property, tenants in place and showing better than 8%.  We bought under market value so have gained instantly, rather than leaving it to 'normal' capital growth.

    Keep looking, they're out there.
    Cheers,
    Tracey

    Hi Tracey,

    I like your strategy keeping that cashflow healthy with those 8%+ yields.

    I also think you are bang on the money with Central Queensland. Once they dispose of the excess water that’s limiting access to pits and infrastructure in those CQ mines their economy will take off I think. I read an interesting article in the weekend edition of the Fin Review that predicts the Qld economy to grow at 5% 2011-12 and 5.25% 2012-13 as exports of coal start ramping up and investment dollars come into fruition. This growth is predicted to outstrip all other states.

    Great time to be buying with all this doom and gloom around as well.

    I’ll be on the hunt again within the next 10 months.

    Jack

    Profile photo of photon2157photon2157
    Member
    @photon2157
    Join Date: 2011
    Post Count: 5

    By investing in low income areas, are you foregoing capital growth in favour of cash flow?

    Profile photo of CatalystCatalyst
    Participant
    @catalyst
    Join Date: 2008
    Post Count: 1,404
    photon2157 wrote:
    By investing in low income areas, are you foregoing capital growth in favour of cash flow?

    I don't believe so. But suburbs vary. Many people will only invest within 10km of CBD as they say this is where CG is highest. For many suburbs that is true but not all. When prices rise it is usually a ripple effect so outer suburbs (I'm talking major cities here) may get their growth a few months behind.

    If suburbs near the city go up then the next ones will, etc etc. Of course there are individual suburbs and even streets that won't go up as much.

    Personally I need CG + decent cashflow. If CG is great but it costs a fortune to hold then overall it's not that great (and there's only so many of that type of property you can afford to hold. Also if you have great cash flow but no CG are you working toward wealth creation or just holding your own? Depends what your strategy is. Maybe get a balance. The positive CF ones can help you hold the high CG ones. 

     

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,065
    photon2157 wrote:
    By investing in low income areas, are you foregoing capital growth in favour of cash flow?

    I don't think so. Look at areas that are considered low income such as Logan in QLD and the far northern burbs of Adelaide – their growth figures over the last decade have been quite good. Admittedly the prices are also coming off a relatively low base.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of SandraLSandraL
    Member
    @sandral
    Join Date: 2010
    Post Count: 45

    I would recommend the western suburbs in Sydney, eg Liverpool, Campbelltown and beyond. You get relatively high rental yields, low vacancies and projected population grwoth over the next 20 years.

    The key to mitigating your risk of bad tenants is to add value to the property you buy (renovations) and create something that is better than the average property in the neighbourhood. That way you should be able to achieve a higer rent and attract above average tenants and insurance also helps, of course. We have a number of clients who have invested in the western suburbs and are doing well. 

    Profile photo of BruceBruce
    Participant
    @hodge
    Join Date: 2017
    Post Count: 1

    Hi all, in less than three years the Rosebery mine will be dug out. I was looking at buying a place there, but fortunately I have a friend who is a metallurgist and has worked for the mine. Yes, MMG will start rolling up their operations within a few years, leaving any investment in Rosebery an empty promise. Tourism is focussed on Strahan (which is delightful) and Queenstown (which is central and the biggest town in the North West). I suggest you look at the number of properties on the market in Rosebery already. The locals know what’s coming. Soon 60% of the jobs in town will be gone. And therefore all the workers and their families will leave, and the business that supported and supplied them will shut down. Sad, but very true. I suggest you research the ghost towns in this region. One of them had twelve hotels! And yes, they were all mining towns where the mine closed.

Viewing 7 posts - 41 through 47 (of 47 total)

You must be logged in to reply to this topic.