TAS Launceston Tasmania

Hi everyone just a quick checking, what's your thoughts on Launceston, I'm looking on a couple properties around the 250000$ mark already rented for around 240$, they would be a very little positively geared. It won't cost us a lot of money, it sound too good an easy to me.
What do you think?
Thanks

 

Sounds like a pretty poor-average yield for Tasmania compared to other discussions on here (& unlikely to be positively geared after all costs unless you are using a substantial deposit). You'd want to be sure you are buying in an area ripe for growth if you aren't focussed on yield.

'It won't cost us a lot of money' shouldn't be the basis for buying an asset, what makes you think the properties you're looking at will make worthwhile investments?

 

That is a terrible yield (in my book), and what are the growth indicators there; other than a spike from investors fleeing Melb and Syd?

 

What are you hoping you'll achieve by buying one of these properties?

 

Thanks for all your replies, I really appreciate, I probably sounded very naive and silly,but we are just trying to get something to start with a little budget, the bank won't lend us more than 250000$ and we do have a good deposit. I'm spending hours and hours trying to understand where we to buy and I'm going a bit crazy.
Our thoughts was get something and let the tenants pay it off.
So from what you aresaying I will have to go back to the drawing board and start all over again.
It's soo hard to do the first step, where do you think we should look?
Thank very much for your help.
Christian

 

Hi Christian, I'm only a noob looking for my second IP but am in a similar situation to you. I have a low budget too and don't know where to start in this difficult lending environment.

There are a couple of threads on Launceston already on here, why don't you read through them? If you see someone with a helpful post, maybe send them a private message.

If you're looking for a tenant to pay off the place, make sure you factor in that interest rates are going up at the moment. So say it goes up to 7%, plus rates etc 2%. So that's 9% yield that you need to cover interest payments and other expenses. Add to that the fact that it is getting harder to get interest only loans an harder to extend interest only loans. So be prepared to potentially pay P&I at some point. Tasmania is having some CG growth right now but also be aware that the market there is more volatile than the mainland.

Not trying to scare you but these are just some of the factors that I'm considering as I have a similar search criteria as you and I've been looking at Tasmania too.

 

We bought in Launceston around 18 months ago and it's moving . ( booming is what our agent says ..) but if you look at the 10 year averages on realestate.com
You'll see that they've moved up in the last 3-4 years , but they've only just got above the previous peak . If you check the monthly prices for the last year they seem to have gone up further than the annual average ( which is a lagging indicator ) would suggest it might have gone up sharply in the last year
It could also indicate that a series of more expensive houses have sold ...

Invermay , which was our initial target suburb , that doesn't have the same rise in the last year .

If I was thinking of buying at the moment , I'd be getting on the phone and talking to as many agents as I can . Some will spin a line , but some will give an accurate picture of what's happening and when you hear a similar story from a few , you're getting close to what's actually happening .

I ( obviously ) have no problems with buying there and we have also just bought in Hobart . Price 267 , rent 330 , settled one week ago .

Every thread about Tassie , Hobart , etc brings out nay Sayers but historically it seems to keep pace with similar percentages to other places . Several forumites did very well in the last cycle . There are more positive things going on in tassie at the moment than in the last cycle , but back then even negative population growth didn't stop its booming .

Personally I wouldn't buy at that yield . You should be able to get better yields , and probably in nice areas .

Just because you can easily find a good deal somewhere doesn't mean they're dodgy . It just might mean you ahead of the crowd .

The two places we bought where houses split into three units , in good locations which are returning around 8 % . Wouldn't get that now but I'd be wanting more like the return we got in Hobart .

There are threads on Launceston , Hobart and Tasmania over the last couple of years , but not much more before that . There are a couple of Tasmanian based investors on another forum and I picked their brains and and have incorporated their recommendations on the following and other threads .

TAS - Launceston - The official unofficial hype thread

cliff

 

There are better yielding properties around Hobart. I'd be looking there if you want to buy in Tas. places like Chigwell are in that price range at about 6% yield.. not a recommendation. I know nothing about Chigwell. I've been looking closer in to the city.

 

These two graphs show asking prices in Launceston ans stock on market but of which are moving the right way

SQM Research - Total Property Listings

SQM Research - Weekly Asking Property Prices

Some I'd be looking at if I was buying now - no DD done

4 Russell Street Invermay Tas 7248 - House for Sale #125014990 - realestate.com.au

11 Ross Avenue Invermay Tas 7248 - House for Sale #125605558 - realestate.com.au

22 Leslie Street South Launceston Tas 7249 - House for Sale #125811682 - realestate.com.au

21 Goodwin Street Invermay Tas 7248 - House for Sale #125554502 - realestate.com.au ( looks like a project , but my son's rented a lot worse , and 13 square is big )

This next one is interesting . Shows the sort of value you can get .
3 Ray Street Invermay Tas 7248 - House for Sale #124156482 - realestate.com.au .
While it's a very nice house , the reality is that when we were looking 1 1/2 - 2 years , we saw nicer houses , in bigger blocks in better suburbs for similar or less, so it suggests to me that the market has moved a fair amount .

Cliff

 

Chigwell , Houso .

Tasmanian bogans in a league of their own . Personally we've avoided houso places like chigwell , ravenswood and there are forumites who have sold in similar places down there due to constant tenant problems .

Many of the places we've bought in q'land have been in houso areas , but Tasmania ..... the winner of the show Bogan Hunters came from tassie.

Good point Bayview , but for me that is a reason to buy there . Sydney and Melbourne peaking . It is the investors who've done well in Sydney and Melbourne who help drive the market , but also the retires and those who are sick of the big smoke or can't get a foot hold in Sydney who help drive the market .

Sydney is now over 5 mill , Melbourne 4,6

Hobart over 220 k and growing

Launceston just under 90 k , but look at this graph If you look at the stats below the graph the growth rate per year was 5 % per year .

So you don't need that many people changing their focus in Sydney and Melbourne to move Tasmania ( though if it moves too far , the kiwi's might push it back .

Both

 

Please never think that. Every one of us was a newbie with not much knowledge.....

I still am!

You are here; and to NOT ask the questions would be silly.

 

Thank you soo much guys, you really lift my spirit up with your replies, some of the house that see change posted are the same as the one that I have already enquired about with the agent. I will give a look to Hobart as well.
https://www.realestate.com.au/prope....com.au/property-flat-tas-trevallyn-125594246
What do you gays think about something like this?
There a few of this for sale as 2 one bedroom unit for sale.
Cheers

 

As mentioned stay away from the housing areas ie chigwell. In Launceston stay away from Ravenswood and Rocherlea. Be wary of Mayfield and Mowbray. Invermay has some amazing federation homes however there are still some average areas. It has improved dramatically over the years and the uni of Tas is relocating so there will be a strong rental demand. The good suburbs include, Newstead, Norwood, Trevallyn, West, South and East Launceston.

Hope that helps.

 

Dynamic vision for university city

Looks good!

 

What are your thoughts on the property below? In your opinion is the location okay? The house certainly has plenty of character.

52 Salisbury Crescent West Launceston Tas 7250 - House for Sale #126128066 - realestate.com.au

 

Looks quite nice .You need to look at the specific location and I do'n't know Launceston well enough to give an opinion . We do have one place in West L .

Cliff

 

That looks really nice .

Cliff

 

Property looks ok. Salisbury Cres is a nice spot especially if facing NW. Only issue I can see is the parking but seems well priced. Key2 who have this property price property very well.

 

Launceston following Hobart’s lead with house prices heading upward - realestate.com.au

 

Hi all,
The last 6 months have seen significant rises according to Richard Bailey (Bushby RE).
Invermay for example has seen median price go from the 220's late last year to 288k last month.
Mowbray has seen growth almost as good as well, going from around 200 to 250ish.
Cheers,
David