Cash Cows

How are these cash cows holding up atm? I'd imagine high yielders are hurting a lot.

 

Its too early
Do you mean yields will drop???

i have not reduced rents in US, but reduced rents of 2 in Australia, thanks to the prime minister’s vague idiotic policy on no evictions for 6 months

just received 10 rents in US, got another 8 to come in for April

US stimulus package attractive, so government is paying salaries for anyone who lost their job for 4 months and they will also be receiving $2000 per couple and $500 for each child

 

Those are in Goulburn, where the vacancy rate is @ 1% and hasnt exceeded 1.7% in many years. But we also do these in Orange. Sometimes Bathurst - similarly low vacancy rates . We have tenants signed up for these ones 2-3 weeks before they are even ready to handover

 

They are getting @ $30 per week MORE than we had estimated...plus NRAS.

 

What are there purchase prices?

 

Yea yields falling pretty quickly, so are prices

 

650-660K, depending on the land price. Most of them have been priced at 652K or 655K.

 

In Tasmania, where yields ( and prices) have been massively artificially inflated by the popularity of air bnb - you're about to see rents take a massive fall.... elsewhere, I don't think you'll see huge falls .

 

I do not know about Goulburn area but for very low $300K are those properties like this a good buy?

https://www.realestate.com.au/property-house-nsw-goulburn-133414190

 

Euro73, as someone who has heard about the Tasmanian market out-performance in recent years, but doesn't follow that market - that is a very interesting insight into the true performance of the Tasmanian market. Thank you.

 

I am not sure for this particular property, however, being able to buy 2 free standing homes for similar money to one dual occ is a bot of a no brainer to me and would minimise risk due to a bit more diversification.

 

There has been a 536% increase in listings for fully furnished rentals in TAS for the week of 20-26 March. It's a stunning statistic. This cant be anything but airbnb stuff flooding back into the resi rental market ..

ACT is not far behind...533% increase in listings for fully furnished rentals
SA - 345% increase
QLD 175% increase
NSW 170% increase
VIC 130% increase
WA 57% increase
NT the outlier with a -10% result????

Furnished rental listings surge 530 per cent in Tasmania in three weeks - realestate.com.au

Hard to conclude there will anything other than a sizeable drop in rents in some locations , with all this supply coming back into resi markets , borders closed to immigration and many tenants unable or unwilling to pay rents ..... it may turn into a race to the bottom for landlords trying to get their properties rented.

I might well need to add ACT to my earlier comments about TAS being the only seriously at risk location for big rental reductions. SA maybe... although I suspect a lot of that is outside Adelaide, in the Barossa, Kangaroo island , Eyre Penninsula etc

When the tide goes out......

#cashflowisking

 

Our latest cash cow...

 

How long does it take for planning permits in that area?

 

These are complying developments .... no DA required

 

Where are you seeing this? Do you have any Evidence? In SOME areas as discussed above yes falls are likely. Many other areas not so much from what I am seeing.

You say you don't know Goulburn then ask for about individual listings? I Suggest doing lots more research such as local economy, demographics, street-level analysis to rule out high public housing streets or likely problem areas. Know where the money is, where the middle families are, where the up and coming areas are. Then due diligence including flood, bushfire, easements, zoning, restrictions and local council vision for an area. Then study comparable prices. Then ask how big is the required renovation on a listing like this. Then check for structural problems or termites. Then you will know if it is a good deal or not.

 

I’m seeing it at my own and my family’s properties - CBD retail, malls, inner city apartments and houses, blue chip suburb houses. This is Melb.

In fact I think most of the retail tenants have just gone AWOL and not paid a cent for April - in meantime have a hundreds of k land tax bill courtesy of government MPs on business class tickets. Nice one by Scomo. Lucky I have so little debt and so much cash buffer I don’t really care as our last buys here was like 2014, and earliest was like 1998 but lots of recent entrants going to be in trouble.

 

Sorry to hear it. Yes all those property types CBD retail, malls and inner city apartments I would think are about the hardest hit along with international tourist destinations like Cairns. More surprised about blue chip houses but I guess this is highly location dependent and depends on the types of workers who are buying or renting.

Being regional / coastal and having a lower median price, plus higher percentage of essential workers and already retired boomers it seems we have been insulated from much of the worst of it.

Commercial RE down here still being impacted but far less speculative so many owners have no or low debt so very few knee jerk reactions to sell or make permanent changes. Temporary payment holidays of course they are happening in retail. Was discussing this on a video interview with the biggest commercial property manager in Nowra last week. He said they don't have across the board evidence of any yield or price changes yet.

 

That's why I wrote that I do not know about the area. A quick search on the for sale properties in that suburb shows asking price from $300k for older house to a lot more for newer house. Not every investor does have the skills, experience or financial capacity like Euro to plan for NRAS, dual occupancy, build at lower costs and achieve positive cash flows. There could be many investors that like to build on the success from Euro's footprint in regional areas but can only afford at a lower price entry so when you pointed out to all those needed due diligences I am sure that would be useful for many investors thinking or planning in the area

 

Sorry I wasn't trying to sound critical. I agree not everyone can (or should) afford new in every market. I am a big fan of affordable investments under the median of the local area (it removes many kinds of price risk). I just hate to see people carelessly buy a property without proper research because someone on a forum says "yeah that looks like a good deal". I am all for cheap renovators. I often buy this property type for clients. Getting quality help is, of course, a good option if you don't have the time. If you do plan to go it alone then just proceed with caution and do good due diligence especially if buying outside your area of expertise.