How are the regionals doing?

Discussion in 'Where to Buy' started by TMNT, 22nd Jul, 2016.

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  1. euro73

    euro73 Well-Known Member Business Member

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  2. euro73

    euro73 Well-Known Member Business Member

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  3. MorganHB

    MorganHB Well-Known Member

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    I thought I’d share my personal experience with my first IP, which was in Wagga Wagga.

    There were a few things I could have done a lot better and I’d like to pass this on, so new investors can hopefully learn from my beginner mistakes.
    Before I even bought this property, I spent a lot of time reading property mags, books, going to seminars, speaking to people etc...In hindsight, I did this for too long and got ‘analysis paralysis’...I snapped myself out of this and started to pound the pavement!
    I bought a 3, 2, 1 house in Mount Austin for $171K.
    I was convinced that buying regional was the best idea and that buying in a trust was also the best (Wrong)...
    I had basically bought someone’s solution, that is, someone had bought the place cheaper than me, renovated it and then I bought it :oops:
    To this day, it’s my worst investment property. It’s gone up in price (but nothing to brag about) and the only thing it has going for it is positive CF.

    What I did right:
    • I took action (eventually),
    • Bought a property that was positive cashflow - 7% yield
    Lessons learnt:
    • Don’t buy in a trust - personally I found they’re more expensive YoY, lending process can be slower (unless you have a gun broker ;)) and losses can get retained in the trust,
    • Don’t buy something that somebody has already renovated themselves - ie buying someone’s solution,
    • I bought in a market with no massive infrastructure plans at the time - not the best idea.
    • I also didn’t know about Somersoft (old PC forum) at the time...To this day I wish I had discovered it sooner!!!
    • Finally, I wish I had met more like-minded people - ie people who had done what I wanted to achieve….which was buy many properties.
    This property affected my ability to move on to the next property.
    After seeing the light on my beginner mistakes, I saved hard and bought my second IP (also regional).

    IP2 was stressful, time consuming but incredibly rewarding…I’ll put together another post for this one later.
     
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  4. Gockie

    Gockie Problem solver Premium Member

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    Whoops... my sister also had an IP in Mt Austin... bought around the year 2011 for 170k, she sold for something like 172k 5 years later.... while Sydney boomed, that property did nothing... she had some not good tenants and a long vacancy period while owning it.... street presented really poorly as the neighbours were housos.... took a long time for her to sell it.... it was like, take the offer and run....
     
  5. MorganHB

    MorganHB Well-Known Member

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    Ha, Jesus! :eek: I've been pretty lucky with mine. The longest I've had to wait was 3 weeks once
     
  6. euro73

    euro73 Well-Known Member Business Member

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  7. hobo

    hobo Well-Known Member

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    I’d like to qualify this particular point by saying:

    - Don’t buy in a trust unless you have a plan for the trust (including income/losses/assets).

    Yes, any trust losses will be quarantined. But you should know that before going in, and can still work with that if you have a plan that takes that into consideration. Obviously if you plan on only buying one IP, or multiple-but-only-negatively-geared IPs, then maybe a trust isn’t suitable. But they ARE suitable for many people. Seek knowledge for your own situation.
     
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  8. spoon

    spoon Well-Known Member

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    I owed Wagga property before. Except Central and near the lagoon, most other places were +ve cash flow (deceptively) but zero/close to zero growth. Taking into consideration other expenditures, you are in the red. A month of two vacancies will put you in -ve quickly. Of course if you have the Army or RAAF personnel renting, then you might be lucky but your home needs to be up to specs. Very little subdivision or CG potential. Still a good place to be.
     
  9. Chrystee

    Chrystee Member

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    Hello, I'm looking to buy my my first IP over the next 6 months. Can anyone please tell me their thoughts if I should buy in Warragul, or Korrumburra? I'm looking to buy a 4,2,2, and considering building as well. I have about $70,000 to invest and looking for long term investment, thanks :)
     
  10. jimmy

    jimmy Well-Known Member

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    I personally would buy in Warragul over korrumburra every day of the week! Last time I checked into Warragul, albeit it was over a year ago it was flying and agents were struggling for listings (not sure on current market). A lot of people are moving out from Melbourne and commuting. As for Warragul itself I would say it lacks a little in the jobs department (at least high paying jobs) but is a beautiful place if you would like to live there, as for an investment it may be decent long term as proximity to Melbourne/Dandenong/Latrobe valley isn’t to bad where some of the higher paying jobs are.
    Not advice DYOR :)
     
  11. Chrystee

    Chrystee Member

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    Thank you for that, I think I will buy in Warragul. What do you think about the potential for Korrumburra though? It seems it is under development of a $5 million Community Hub commencing next year, and $24.5 million from the government to expand Burra Foods in the near future.
     
  12. jimmy

    jimmy Well-Known Member

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    To be honest I know it’s a beautiful place korumnurra but for me it just doesn’t have the population or infrastructure. Warragul/drouin is one of the fastest growing regional centres in Australia, I would be more inclined if I had to chose to go Warragul/drouin way, hope that helps :)
     
  13. euro73

    euro73 Well-Known Member Business Member

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  14. johnmteliza

    johnmteliza Well-Known Member

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    The Mornington Peninsula is going brilliantly as a holiday/coastal/regional area on the fringe of Melbourne. The Mornington Peninsula recorded the 2nd highest price growth of any area in Australia in 2017/18. The growth is especially prominent on the port phillip bay side on the Mornington Peninsula which boasts the most premium suburbs in the market along with the best beaches. Just recently the area has been a key focus with these articles such as 'Mornington Peninsula buyers get market off to a great spring start' and 'Outsiders and locals to keep Mornington Peninsula prices steady in spring'. 7 of the most expensive suburbs have grown between $300,000 and $815,000 alone in the past 12 months.
     
  15. Xiao Hui

    Xiao Hui Well-Known Member

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  16. MorganHB

    MorganHB Well-Known Member

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    Hi everyone, given Orange has featured a lot in this thread, I thought I’d post about my IP in Orange and how its gone since I bought it.
    I picked up a 2/1/1 house in 2014 for $80K...I know, cheap right?!
    This is because it was fire burnt...It was so bad that you could see right inside to the kitchen.
    It needed a BUCKET of work...that's a long story but basically with hard work and time off work I got it all done for $50K...turning it from the worst to the best in the street.

    The reval on the ppty came in at $180K and in a short time, I’d made $50K, which I was absolutely stoked about.

    Since renovating, prices have increase 10-20% and I’m sure this will continue with time.

    Go Orange!!!
     
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  17. euro73

    euro73 Well-Known Member Business Member

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    Well done @MorganHB

    There's a real under supply of registered land in Orange, now . The new subdivision planned for the North is going to be asking 210K - 220K for blocks that are the same or smaller than lots we were getting for 165-175K just a few months ago, 300-400 metres away. That's going to drive the price of a new house and land package up by 40-50K overnight , which is approx 10% increase on the median

    I've been telling people for 18 months that Orange was going to go gangbusters . Great medical facilities -the biggest medical precinct outside Westmead. Lots of young families and tree changers moving there. New Gold mine opening. Department of Primary Industries relocating its HQ there. Largest dental school in the nation. New Medical School opening at the University in 2021. Lots of money around etc etc etc.... Some of the naysayers here said dual occs in regional NSW would be a disaster. That I was putting people into no hoper properties in a no hoper location in the middle of nowhere , and that I was duping people because all their equity would be used up and their borrowing power would be ruined for years ....

    Mind you, these were the same people who said the APRA changes were temporary when I posted about the impacts to borrowing capacity back in 2015. The same people who said the P&I re-sets wouldn't be a problem for anyone. The same people who argued growth cycles would soldier on when I posted that you cant bake the same cake with different ingredients. The same people who argued that living expenses wouldn't attract any additional scrutiny throughout 2018 when I wrote in late 2017 that HEM's and living expenses would be a big focus throughout 2018

    Well.........we know how the APRA stuff and Living Expenses stuff played out dont we? ... we are starting to understand how the P&I thing affects people arent we? And where have those ever reliable "cycles" gone I wonder? And how is Orange playing out ? Growth of over 12.5% year to date. Rental growth of @ 8% in the same period. Vacancy rates down to 1.1% , and likely to continue to fall as several hundred high paying medical, mining and Govt jobs head that way throughout 2019 and 2020. With so many well paid people heading that way, a serious shortage of registered land, connect the dots - rents are certain to climb...as are prices. It's got a lot of legs in it yet.

    Where are those naysayers now I wonder.......? :)






    Go Orange!!
     
    Last edited: 26th Sep, 2018
  18. ZaneeEdkins

    ZaneeEdkins New Member

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    Interested in Goulburn.
     
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  19. euro73

    euro73 Well-Known Member Business Member

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    It's interesting that you'e interested in Goulburn. About to launch an NRAS project there
     
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  20. TUF250

    TUF250 Member

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    Has anyone here got some first hand experience with Traralgon? We have been looking out that way at some cheaper property for some positive cashflow which suits us in this market. I have been reading a lot about infrastructure there but there is not a huge amount of information available. We are heading out that way next week to suss out the area but was hoping to get some guidance as to where to focus our attention. Which schools, areas etc.

    Also looking at Moe and Morwell but I understand that these are not as sensible a choice at this stage from what I read.