Hi all
I was just wondering if there is anyone out there that is willing to let fly with any up and coming boom areas that they think will take off in the next couple of years. I am looking for IP #2 now and I don't want to buy another in the same area as #1 which is in the hunter valley of NSW. I am looking at something cash flow neutral or better with the potential for capital gains down the track or straight away, bonus….lol. I don't really mind where the location is as long as it is in either NSW, VIC, TAS or STH QLD. I don't want to spend too much, around the $200-$300k mark would be ideal. Anyone with any opinions on where and why would be most appreciated and will be researched very well before I venture there. Even if you don't want to put it out there on here you could always send me a private pm or email [email protected]. Thanks to everyone for having a read and hopefully we may even locate a few boom towns,
Happy Investing
Newcastle Knight
Jac,
Do you think with all this investor activity we'll see vacancy rates rise in most areas?- I would imagine we would (obviously some areas more than others).
Rusty, it all depends where you are talking about. Perhaps in small mining towns where the boom is over you might see vacancy rates lift but if your talking about capital cities or major suburbs you would need some seriously heavy investor activity to see any noticable difference in vacancy rates. Investors make up a small portion of the general population
Newcastle Knight, how has your first IP performed? If it has worked why not do it again in the same area? If something is a success why not reproduce it?
It is surprising how quickly a tight vacancy rate can change once the magazines and forums suggest to everyone that it is a hotspot. On one hand you could reproduce by purchasing in the same area, on the other hand then you have all eggs in one basket. Sometimes it is good to spread your risk. It would be unfortunate to be sitting on two vacant properties if suddenly the area had a big increase in vacancy rate.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Thats a bit of a wishy washy reply Jacqui. If its a good basket then keep using it. There is more risk is going into an unknown area if you already know you have a good area. A situation like this would require a definite exit strategy ………………………..What is going on with the "enter" button on this forum??
Hi Corie,
Nice to meet you.
My comment is not wishy washy at all. The idea of investing is to take yourself forward. If indeed a shift changed in your investment suburb, the hit to your hip pocket would be greater, the more properties you have there. It is necessary to ask yourself the question "what would the impact be if they were both empty at once." It can be a pretty crippling scenario for a lot of people. It is important to know an area regardless. It is not the case that due diligence stops after IP1.
With regards to the enter button – in some browsers it won't work when posting in the forums. In particular I have trouble with using these forums via Internet Explorer. I find that the problem doesn't exist in Firefox – so that might solve your pain.
Kind Regards
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Yes i totally agree Jaqui, investing is to take yourself forward. I i was looking for second IP I would be asking what is going to give me the best return. If that meant buying again in the the same suburb then I would not hesitate……assuming my first IP had performed well. If a suburb is well established, has more than one industry with a good history of renters then the chances of a shift change in the suburb are very small unless something goes drastically wrong in that suburb. The only places where we really see this happen are mining towns. Newcastle knight, the hunter valley is more than just one suburb and is a large geographical area that has many industries, including mining. I think there are still good deals to be found in Singleton, Muswellbrook and Maitland, even Newcastle! All Im saying is dont rule out the Hunter just because you think you should invest in another area.
Hi Newcastle Knight,
Tread with some degree of caution buying into suburbs openly publicised as being boom suburbs. You would not want to find yourself owning a rental property that is hard to rent out because too many investors have flooded into the area and there are more rental properties than the area requires.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi Corie,
It is certainly possible for demand erode in areas other that mining. Once the magazines start telling people what a great spot Town X is to invest in, brace for the influx of investors.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi Jacqui and Corey,
Nice to hear from you Jacqui, it has been a while. I totally agree with your 1st comment of openly publicised so called hot spots and by no means would i ever venture into anything without thorough research 1st. It is a bit of a worry having all your eggs in 1 basket as you say, because I have my PPOR in the same town as my IP, therefore already a bit of risk there. Even though my IP is doing very well at this stage, (only had it 6 months), has a net yield of 7%, has good tenants which moved in 1 week after settlement and it is in very good condition so hopefully not needing to spend anything on it for a while, touch wood. The town is not doing as well as I would like it too at the moment with a lot of local mining jobs going and a lot of rentals on the market . In saying that, there are also plenty of positives in that there is other industries other than mining so it is not a 1 industry town. Also plenty of new developments are going up so someone must know something and median house prices have remained steady throughout the coal sector crash. I know investing carries risk, but I am 1 for spreading it which was my main reason for the initial post. In saying that if another opportunity came up here that was too good to refuse I would not hesitate to go for it because the area will again go through its property cycle like every other area. From your comments Corie I can't help to wonder if you are a local too.
Cheers Troy
Diversify, diversify, diversify.
Certainly agree and can't see a particular problem in buying multiple properties in the same suburb if the fundamentals haven't changed from the initial acquisition
In 1998 a bought a house in an Inner Western suburb in Brisbane.
Started to perform well so i bought a block a block of 24 units in the same suburb.
Now some years later i wish i had bought another 25 properties in the same suburb as they are have gone up over 350% in the last 11 years.
Certainly i agree with Jacqui that when a so called expert or well known property celebrity tells me to buy in a particular town i look to exit myself.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Troy, dont get me wrong mate I totally agree with diversification I just wanted to present the question. Its always good to have a few different ideas and view points. In answer to your question I am NOT a local although I do have an IP in Rutherford that I bought when I was a little less educated. I have looked at many properties in the hunter over the years and have been very close to closing a few deals but for various reasons they have not gone through. I still do like the area and even though there is some fear about job cuts in the coal industry I dont think coal exports are going to slow down at all and will most likely increase if anything.
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