All Topics / Help Needed! / Advise Needed on Australian market

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  • Profile photo of DavidRDavidR
    Join Date: 2016
    Post Count: 2

    Hi Everyone,

    I just joined this forum. I am an Aussie living in the US. I have been here for seven years and actually just recently completed my first step into the RE investment world by buying two properties as long term holds. A SFR in Charlotte and a duplex in Indianapolis. I was a complete novice six months ago and I used a website called Bigger pockets (which I am sure most of you are familiar with) as my main resource to educate myself with.

    My sister who lives in Sydney has saved up a considerable amount of money and is looking to invest somewhere in Australia. I am trying to help her but I am completely out of the loop when it comes to the Australian RE market.

    I have researched a ton of markets and feel that I have a pretty good idea of what is available in my areas of interest in the states but I have no idea at all what the market and conditions are like in Australia.

    Using the 1% and 50% rules have really helped me understand what I should be looking for in an investment market and property and I am really happy with the purchases I have made. I am planning to make another purchase in about six months. This strategy is quite easy to obtain here in the US but I have no idea if this is even a viable option in Australia. I am wondering if we will need to adjust our approach to fit with the market conditions over there.

    I actually do have a rental property in Southport, QLD which I purchased about 8 years ago. I was very ill prepared for that investment and I went into the whole thing with absolutely zero experience or understanding of smart RE investing. To be honest it has been a financial disaster for me. I want to help my sister get involved in RE investment and ensure she does not make the same mistakes as me but I am not sure if the strategies and skills I have learned that I believe can work for me here in the US will work in Australia. I would love to get some insight.

    My sister lives in Sydney but is originally from the Wollongong/South Coast area so that would probably be the best place to start for her but if the numbers do not work there then she is open to exploring other markets. She is looking at a buy and hold with positive cash flow and medium-long term appreciation potential

    Any help or guidance would be greatly appreciated.

    Thanks so much for your time.


    Profile photo of Colin RiceColin Rice
    Join Date: 2011
    Post Count: 338

    Australia and its cities as well as larger towns will have micro markets.

    This infograph may help and its valid as @ July 2016:

    Can you expand on this please:

    Using the 1% and 50% rules have really helped me understand what I should be looking for in an investment market and property and I am really happy with the purchases I have made

    Colin Rice | CDR Finance
    Email Me | Phone Me

    Perth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]

    Profile photo of[email protected]
    Join Date: 2009
    Post Count: 12

    Hi there
    I am a german in the victoria market and usa, las vegas.
    In las vegas I have 15 to 22% return plus capital gains.
    Here in australia.
    Well very find cf properties is pretty unlikely.
    I achieved 6.5 and 8% in bendigo plus gains.
    In melbourne we had to buy a big block and doing plans and permits for 3 houses in order to create money.
    I have not found a cf property in melbourne.
    1 house in ringwood sold for 1.2mio and is now for rent for $590/week!!!
    Extreme case but it shows you how bad it is.
    On average $600000 properties achieves in croydon 450 to 600 dollars/ week if you doing ok.
    After tax, depreciation, repairs , rates , you end up with a negatively geared property.
    One area here , frankston, is worth researching for growth and subdivisions.
    Hope this helps

    Profile photo of MTRMTR
    Join Date: 2004
    Post Count: 663

    Hi Bernie
    I am from Perth playing in Atlanta market great cash flow, also developing in Melb in Croydon, coincidence:)

    Profile photo of MTRMTR
    Join Date: 2004
    Post Count: 663

    Hi DavidR

    Its a tough gig at the moment because we have seen the Sydney market booming since 2013 and many investors have doubled their money, my guess is buying now is possibly too close to the peak, just my opinion, smart investors have already taken money off the table or accessed equity and moving into different markets.

    1% rule wont cut it in Sydney, due to massive growth in this market you may be looking at around 3% rental return, very poor. On a positive note interest rates in Australia are at historical lows.

    What is the answer? Either your sister looks at other markets around Australia that may be at a different point in the cycle ie Brisbane or sit and wait, or better still buy in USA, Charlotte is hot hot hot?? Could you help your sister purchased something in this market? There are many markets in US that will continue to grow. I have been playing in the Atlanta market since 2011 as well as Sydney and Melbourne and from my personal experience superior growth and cash flow has been achieved in Atlanta.


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