Geelong Sub-Portfolio

Hi All

I have had quite a few people ask me about Geelong portfolio they are all new builds. As I believe value is not there in Geelong so I am not buying there any more I am happy to share.

IP1 - Mt Duneed (Armstrong Creek) - double story 3x2x2 total cost 335k completed 2016. Rent $465pw. Value today 680k
IP2 - Mt Duneed (Armstrong Creek) - 3x1x1 single storey total cost 260k completed 2017. Rent $420pw. Value today 580k
IP3 - St Leonards - 4x2x2 single storey total cost $355k completed 2020. Rent $410pw (under rented). Value today 750k
IP4 - St Leonards - 5x2.5x2x2 total cost $395k completed 2020 Rent $435pw (under rented). Value today 870k. One up the road just sold for over $1m.
IP5 - Surf Coast building currently land acquired Dec 2020. 4x2x2. Cost 620k....end value $1.1-1.2m. Expected rent $700-800pw on completion expected to be Aug 2022.

Some others like @Westie @kimba88 @ashish1137 @craigs have bought in similar areas based on my recommendations and have had similar results.

I am posting this so people get a different perspective as a lot assume there is not money in House and Land. There seems to be a lot of misinformation from people who do not have the knowledge. I remember one investor in Geelong turned mortgage broker saying stay away from the new areas. He bought in older areas...the newer areas have outperformed. Talking to locals helps but some never saw the massive booms in the nicer new estates and can't see potential. Some of house which would have been build for say 600k as big double storeys in Mt Duneed are now selling for $1.3m.

As you can see in 5 short years... $2m in investment of which I put in only about 300k (mostly 100% finance) has doubled...and still going. I am anticipating the Geelong market to slow this year but it should still do another 8-10%. I plan to keep also these they are irreplaceable due to the price points now and the future.

I get a lot of PMs asking about this. Normally I do not post these sort of stuff but I thought I would share as I get asked about these a lot! Happy to hear any constructive comments.

 

I've got a niece who bought in Armstrong Creek. Nice area.

 

Yep...a lot of people did not want to touch in 2015-2018. It is within 10 min of Torquay beaches.

 

I have to admit, that when we went there the first time, it was around 2015, from memory, and I thought that it was way out in the boondocks....BUT.....I didn't look at it on a map to see the location at the time. It's grown substantially since then.

 

That is what a lot of people thought!

I even sent a few on here there...one did not even bother investigating..as a noddy broker on here told him too much land it will never go up.

 

To be totally honest, even if I did take a good look to see where it was, I wouldn't have bought anything at that stage, as that was around the time that Hubby retired, so we were still working out the kinks. Buying something at that time was the last thing on my mind. In fact, I thought my buying days were over. How wrong I was.

 

Great work @sash . Everything I’ve read has said not to buy new builds in estates (developer H&L). I’m assuming you bought land then built with and external builder? Do you think one would achieve the same result if buying the H&L package direct from a developer?

What I love about this group is that it challenges my preconceptions and I’m always learning.

Thanks for sharing and congrats on your success - you’ve certainly paved your own way.

 

Thanks mate.

Yes I bought land myself for 96k, 98k, 140k, 155k, 345k. Never buy a package house..as they do load a bit.

Cheers
Sash

 

Good to know. Thanks Sash.

 

Hey Sash, in which state would you buy land to build this year? Thanks!

 

Hmmmm.....let me think.....uno dos thres.....

Western Oostrayaa......Perth and Surrounds....already doing some dhere....

 

Thank-you, Sash. Hopefully I'll finally be able to enter this market since all of my properties are in Vic. Never bought and built before...must admit that nearly bought a land parcel in St.Leonards when it was on the 'cheap'...but instead opted for an established house in Wyndham Vale at the time to have cashflow immediately.

On a separate topic, what's your forecast over next 3-5 years for Werribee area for established houses on 500m2 lots? Thanks!

 

I would you would be much better off in WA......the returns in Mebourne are poor. For example with current costs you would be paying 600k all up (stamps, landscaping, land, build) a new house...in Werribee.

You can build in WA for under 400-450k in quality suburbs with more upside. Potentially 200-300k more in 2-3 years.

 

To reiterate what my man @sash has said, here's one of mine in Lara and the one in Villawood's Armstrong Creek estate:

1. Lara. Total cost $405k, build finished in Dec 2018, rented for $460/week. Bank val'd in December for $680k.
2. Armstrong Creek. $445k, build finished September 2018, rented for $465/week. Bank val'd $720k.

I have another one coming up in Lara, total cost $505k, large deposit. Expected rent at least $500/week. Val should be north of $800k, it's a premium build.

@sash is the undisputed king of H&L. The only other person with similar success with new builds I know of and have spoken with is @euro73 (the NRAS king).

 

Just quietly , I have been the Dual Occ house and land king longer than I was the NRAS king , given NRAS started to wind down in 2016 ….. although I’m still delivering the odd Dual Occ + NRAS into multiple clients portfolios Cha Ching

 

Despite what some might say about you on here, Ultan - you're a star in my eyes @euro73. Multiple ways of creating wealth and Ultan's got at least one way down pat.

 

I agree with above. Land purchase from developers. 10k deposit and let time do the work.(long settlements) Currently in process of building in western suburbs (tarneit) got in at the right time. @sash would you happen to know of any developers in south of Perth who are flexible with settlements and prices? Cheers

 

How long is a long time?

 

I think a year is good

 

@sash, what are you looking for when analysing if an urban growth area is going to get future capital gains?