300k Specialty

Abundance of land.

 

Is that pronounce like I think is, like gosh-'darnit'?

 

Pronounced "Tar-neet"

 

Gosh Tar-neet.

 

A few suburbs in Geelong could be added to the list of places ti check out. Well positioned properties with a land component in major regional centres seems like the way to go.

 

Depends on how you define risk doesn't it? OP wanted cashflow first and outlook for growth second. Bottom end of a large diverse growing regional overdue for a growth phase delivers that I reckon.

 

One reader mentioned Ballarat. How about Bendigo? These two cities always go hand in hand? It is not hard to get $200ish houses in both these places.

Why Albury also? It is a pretty far from Melbourne and its population is only around 40,000 plus..

 

Albury-Woodonga is about 100k. Towns are separated by the river, but really are one economic and demographic place. It has a large and diverse enough economy to consider investing for a cash flow positive play with a decent chance of growth. Where the place is at with the cycle I don't know.

Bendigo is also worth a look; however, IMO Ballarat is slightly cheaper and closer to Melbourne which would make me think Ballarat is a better bet at the moment.

 

Actually, with many people forecasting the property market to dip in time to come, it might be a better idea to invest in the regional towns like Albury, Ballarat, Bendigo etc. They are still relatively cheap and have not benefited from the growth of properties in Melbourne or Sydney. So in times of downturn, they should not be adversely affected. Worse case, if the prices of properties here dip, it should not be a lot since they are inexpensive in the first place..

I personally would avoid Melbourne and Sydney now, irregardless of location - too risky. Moreover, it is too late to go in now anyway..

 

I agree if price/rent ratio is right in Ballarat and Bendigo nothing wrong with them at all. As stated Albury/Wodonga is bigger than many people first think. Really depends on doing your own dd to decide on drivers, future prospects but they are all valid choices.

 

It seems possible to buy a cheap house in Albury, possibly at $150,000 each renting at $210 pw. This would have made the cash flow positive. So with $300,000, we can buy two.

If my strategy is to buy and let the rent pay the loan and sell the house say 5 to 10 years later, buying in the regional towns make sense?

Where are the lousy areas in Albury and Wodongna to avoid buying?

 

A $150k house? - what standard of tenant would they attract?

I'd say the lousy areas to avoid are the ones with this price range.

This is more like it;

http://www.realestate.com.au/property-house-nsw-albury-120816957

Probably a better tenant standard, but no depreciation left to speak of.

 

Also consider this: Cash flow positive properties at that price range can quickly turn cash-flow negative once a large maintenance issue comes up. A new gas water heater will eat a larger portion of rent in a $150,000 house at 7% yield compared to a $300,000 house with a 6% yield or a $500,000 house with a 5.5% yield.

 

For Albury, I would like a house closer to the town centre. Who owns property in Albury?

 

Yes, I agree. Cheap doesn't mean good. Most probably those cheap houses are in commission or less desirable areas. They might not appreciate in value in the future.

 

If I was getting cheapies I'd rather get them in a metro area than country town

 

Isn't Adelaide a country town?

 

According to some

Isnt much smaller than Perth though.

 

Traneit is far from a "gem". It's a dressed up version of Melton.

 

You mean like Mt Druitt and Blacktown?
I am not trying to convince you to buy there (actually not at all) but this view is common and it needs to be challenged in the light of evidence. Buying in HC or ex HC areas is likely to give you a lower socioeconomic tenant in the early yrs at least, there may be problems that come with that, but personally I haven't had that experience. My parents have 5 br brick home in a family area with in ground pool as a rental that gives them more grief than some of my old fibro boxes ever did. Saying somewhere "might not appreciate" because of a current demographic is like saying the wind won't blow because roses are red. Market growth needs to be assessed on its own merits.

It is herd thinking to believe that because something is expensive it is inherently good and cheap is inherently bad.