Hi, I found this article from 2018 with cash flow + growth areas. Where to buy high-growth properties for less than $200,000 What do you think of these areas? What are your picks for 2019 for that sweet spot?
Haha Peak Hill Population 1100 and Walgett 2200 they just picked some very small towns that happened to have some recent growth and called them good investments. Such a narrow methodology in that which completely ignores several different types of risk and offers little for the average investor to benefit from. I am all for finding the "sweet spot" between cash flow and growth but the truth is that this sweet spot varies for EACH and EVERY investor and the locations and deals that suit person A are different to what is a fit for person B. The deals and the regional research are much more nuanced because of this.
This is nothing new.... buy regionals for cashflow, but is it really cashflowing and will you actually make money on these first thing to consider is the fact these are expected gross yields that are quoted, which is meaningless, what is important is the net yields Another consideration is age of property Potential growth, one horse towns will end in tears For me its a NO Regional centres a different story
Personally I wouldnt bother trying to get meaningful cf from residential RE in Australia ( usa is a different story), unless you're able to sell down and have debt free properties and willing to accept a low yeild . For CF I'd prefer to buy commercial RE or ETF/stocks or own a business, and I do all 3.
This is what happens when websites use articles from generic "content producers". Starts with a quote from reasonable source (Cameron Kusher) to the effect that the more affordable end of the market increases at a faster pace than the most expensive properties. A not unreasonable claim when seen in some contexts. But the writer goes on to use that as an excuse to talk about the cheapest properties available anywhere in Oz. (In one horse towns of course). Had she asked Kusher if these particular towns were going to be the next big thing, would he have said "My goodness yes, and you can quote me on that!" I don't think so. I tried to google this young woman to discover her credentials as a property pundit and gave up after about 5 minutes of nothing.
Had a good bunch of these. Turned out to be headaches. Sold most em and now own a couple in Brisbane. Will now just sit back and wait for some growth. Maintenance wipes out the cash flow and aphra killed borrowing power.
I think the so called yield "sweet spot" depends on your age to be honest. Buying residential capital cities is a low risk, low yield (high growth) proposition. So starting early give you a distinct advantage. Sackie above is right that buying (good) residential property for the cash flow has its limitations. I would just add something that has guided me: that if you are chasing yield, you are simultaneously chasing risk (as a matter of economic principle). So beware buying in regionals or outer ring suburbs. Better to buy lower yield properties more slowly and watch them convert to yield properties later on - if you have the time to do it. The only way to get yield in a capital city is to buy, renovate and hold. And this is an excellent strategy.
Thanks for the responses so far. I agree, after posting the above thread I did more research and realised most towns are kind of crappy investments on this list. I think I need to spend a little more on an investment property... I want to limit my next property purchase, to maybe 300K approx... But where to get growth for 300K, maybe even 350K... So WHERE is the question! Outer Geelong areas? Hobart? Launceston? Melton? Even Melton is getting hard to find much under 350K. QLD perhaps? I definitely want to get good growth. Ultimately in a year or three I want to rent out the place in am in now and buy a townhouse or house to live in in Melbourne suburbs. My current place will be virtually cash positive or neutral when I rent it out. In Glen Huntly, VIC.
Think long term and have a plan. It's better to have 5 to 10 quality properties rather than 50 regional properties with little growth in cg or rent. Say 10 properties in 10 years is achievable with a plan. I bought one in April last year and is up 100k, through buying well, got a good deal and a little bit of growth. Happy to sit back collect the rent and let time do its thing
You keep talking about cf and growth, but you also want cheap. Its the three combined that make it hard.
Interesting and recent article, thanks @NewGuy88 ... When the list says "unit" that normally means like and apartment? But I assume not just apartments... Like it could include townhouses and like separate 3 bed ground floor unit, freestanding type things?
Yes, that's correct it could also include townhouses ... best of luck with your research, there is plenty of useful information in the forums from experienced & business members ... Make sure you do all your due diligence & back yourself with decision making ...
