VIC Ararat

Hi mates

I like to know what's your thoughts about buying in Ararat in Victoria?

I know it is not a desirable town. I know its population is stagnant and this part of western Vic is not doing well economically. But I the feel that with the increased investment by the govt into here, there could be some impetus which would make Ararat grow down the road? E.g. the windmill project near Ararat which see more workers coming. The duplication of western highway which created jobs around here but more importantly, reduced travelling time between Ararat to Melbourne to slightly less than 2 hours. The fact that vacancy rate here is low might also make houses here easier to rent out? It's proximity to Grampians making Ararat an increasingly a spot for tourist to stop over?

Houses in pretty good areas selling at $180,000 or so. It's not expensive and might be something that suits the budget conscious investors?

I have stayed here for some time. I will not rate it as fantastic but it's not as bad as some paint it out to be. Thanks. Any feedback is appreciated.

 

If you can get rent sufficient to cover all your outgoings on the property and I mean on a principal and interest mortgage, then it doesn't matter if growth happens or not. Someone else is paying the mortgage and in the long run you'll make money. Could you do better investing in a different area/product? Who knows? If you're comfortable buying there and you're sure there's enough tenant demand to keep it occupied then go for it. I've doubled my money in regional areas so I know it can work. Use your local knowledge and connections to get a really good deal so that you can buy again if you want to.

 

Ellejay

This is a very positive response. Thank you. I have searched and like a couple houses here in the range of $160 to $180,000. And each can be rented for $250 pw. Good condition and doesn't need work.

Reason I asked and hesitated is because when I mentioned Ararat to my friends, many don't see this place favourable for investment. But I do see opportunity here.

 

Are your friends experienced investors or have some expertise?

It's better to get a single right advice, not multiple irrelevant ones

 

Ararat population is declining (link). Not rapidly but the town is losing people. What is so special about the town other than price point?

 

It does have a very small population.so maybe that's what they're concerned about. Population growth drives demand and therefore buy and also rent prices. I wouldn't buy anywhere with less than 100k population myself (or in commuting range) for that reason, but plenty of people do invest in small towns. I'm not sure if Ararat's near any bigger centres? I'm guessing the main industries are agriculture and maybe tourism? If the town is relying on a couple of employers for jobs (and most of those jobs are low paid) then that also affects growth. Do you get many tree changers or retirees moving there? Those things would help demand and price growth.

It's not a place many investors would choose but there will be a few locals, like in any town getting tenants to pay down mortgages to set themselves up for retirement. If you want to invest there just be aware of the influences/risks on your investment and make sure it's the rent return covers the principal and your other regular outgoings.

 

Let's just hope the VB comes with the purchase

19 Blake Street, Ararat, Vic 3377

 

My God but that's a cheap house though.

There's a few things going for that place, large prison with a large permanent employee base, five trains a day direct to Melbourne and some (obviously) very cheap real estate.

The downside is... ?

 

What I've found is that you can lead a horse to an endless supply of cool running water, but you can't make it drink when its heart desires mud.

 

I'm pretty sure if I posted my portfolio of the last few years which was largely held in woop woop regional NZ some would be rolling their eyes too, but I built a multimillion dollar net worth, with not alot of competition. Let's thank the lord for investors who think we make money only by buying high value assets.

 

I know we are talking about Ararat here so pls pardon me for my following request which is sort of diversion.

Ellejay, I am curious to know your portfolio of properties in NZL. I have stayed there for some time and know the country pretty well. NZL and Australia shared many similarities so it might be something we can learn from if you tell us your experiences there? By the way, I am also a believer of buying in areas with lesser competition. Not necessarily that one can only make money buying in the best areas or in the capital cities.

 

I started buying there in 2010. Initially I bought 6 properties around the South Canterbury region as we were living there and I saw value (maybe like you're seeing on your doorstep). No other reason for buying there other than what I'm suggesting to you, you see value and you can gain a valuable asset that a tenant pays for legitimately over time.
A few years ago I bought in Tasman/Nelson area and thrn Hawkes Bay. My buying rules at the time were 100k or more pop (hasn't changed) and 8% or better gross yield.

It was pure luck we had a boom in Sydney that rippled down to Melbourne, Auckland and regional NZ (amongst other areas). The boom was a bonus though and not part of my strategy at the time.

At the moment I'm subdividing some of the properties I held, selling others that have done their dash and paying down debt to increase cashflow. In my spare time I'm also having to fight in court a fellow property investor (I thought) and friend {I thought) who chose to take full advantage of my family's kind nature and steal all of the profits of our recent property sales (another story).

 

Many, both friends and non-friends, didn't see Ballarat favourable for investment, when I first started investing in Ballarat in 2015 either. It might not be useful to compare an Apple(Ballarat) with an Orange(Ararat). If investment fundamentals are right, who cares where you are investing? There are money to be made everywhere in Australian real estate. Just need to make sure the fundamentals are there.

@Xiao Hui knows a lot about Ararat too. You might want to reach out to him.

 

Dear Ellejay and Koko. Thanks for the advices.

 

I'm in Ararat at the moment looking around.
Positives
- Corrections centre is expanding and growing.
- Some infrastructure projects in the area.
- Plenty of solid properties for around 200,000

Negatives
- One waitress commented it's not an ideal place to have kids. Her opinion was based on drugs in the area. She was from NSW, where she says its mostly weed. She said she had seen a fair bit of ice usage in the area.
- Medical you would have to go to Ballarat. Went to a clinic here, not very impressed.

 

Hi there!

I know this is a old thread but just curious if you went ahead in Ararat. I've noticed that COVID-19 have pushed some Metro Melbournians to relocate in the regional areas which have slowly impacted real estate prices