NSW Orange, NSW

Discussion in 'Where to Buy' started by Clint G, 2nd Apr, 2017.

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  1. dabbler

    dabbler Well-Known Member

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    I wont bother debating it, as said, I have seen your methods when there is any opposition to your polished serving.

    You are ignoring the very real effects on cash when certain things happen or go wrong, I am well aware that theory often does not match what can and does happen.

    Insurance does not cover everything either, far from it, and vacancy and costs can easily blow a good yield.

    So you can go on and tell everyone what you like, I am giving them an op to think about the what if...and worst scenarios, cause they happen, have happened to me in the past and I am dealing with multiple problems and vacancies that have come up as this thread has progressed.

    People can also see the many positive things I have said, but I have no rose coloured glasses.....lost them in the late eighties :)
     
  2. dabbler

    dabbler Well-Known Member

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    On another note, and not one I entirely support, but may do so in regard to the pricing of many new properties now in Orange.

    Had someone from Syd who I known for a long time and have invested a fair bit, and while no pro forecaster or anything, they believe just as the ripple from Syd elevates regionals and some country areas, a pull back will happen here too. I think it will just go flat *except* for the new places as the new buildings always pull back and drop, as do all the higher dollar value places when back to normal.

    Time will tell, but it was not long ago outer Syd had house prices that now are similar in Orange, not exactly of course, but if it keeps going......it is worth considering.

    So think about that before you sink sig money into not the most popular setup for the the majority of locals, this is exactly what I do when looking at towns.
     
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  3. dabbler

    dabbler Well-Known Member

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    This also would support my thoughts of when to get in and when not too, people should be able to see they will be getting in now at about the very peak, it is the wrong time IMO. Cause it stands to reason, that just like Syd and Mel, things are likely to drop off or go flat.

    Again, I have nothing too sell, and am not poo pooing Orange at all, just injecting some reality for people too consider, and these sorts of things that not only push your cart, they can be looked at from another angle as well. If people want to think.

    If they only want to be talked into something, then they can ignore me :)

    My message is not avoid at any cost anything, it is think about what your doing, all the pro and the con factors....so you have your eyes open, and this will always serve best IMO.
     
  4. euro73

    euro73 Well-Known Member Business Member

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    Yes, I'm pretty clear about what I do. I'm also extremely clear with publishing numbers for all to scrutinise. I welcome the scrutiny. I go out of my way to be very clear about the numbers . You'll also note I'm very clear about making no promises of capital growth for the Dual Occ's in Orange , and in fact I even make the argument that I assume no growth over 20 years when I model such a property - this is deliberate. It is designed to demonstrate/highlight/point out that such a property , which can pay itself off using P&I over 20 years , can easily survive no growth but still leave you with a handsome financial outcome - an income stream. A property that produces weak yield in the hope of lots of capital growth cannot survive P&I as easily. In many cases an investor holding such a property will come under holding cost pressure and may be required to sell, and while they may realise a one off lump sum from whatever capital gains are achieved, it will rarely if ever be enough to provide any meaningful income for retirement. If it was, why don't we have country full of retired property investors living off the reinvested profits from the massive growth they undeniably achieved over the past 30 years? It's a myth that growth is the be all and end all, is the answer . The past few years have proven this. There are multiple big names on here who had to offload properties because of holding costs pressures. They had lots of equity, but didnt have sufficient cash flow. They have come under pressure and sold down some of their portfolio. They are still in great positions, but they were not immune from the holding costs pressures that weak yields invite. The point is -only the very very dedicated/the very few actually retired with incomes sufficient to enjoy a comfy retirement, from growth alone. And that's when it was much easier , finance wise and holding cost wise. For most, its a myth and they wont ever reach that outcome. I have been, and will always be - about using cash cows to pay down debt and retire with an income stream. I have published and always will publish clear, factual numbers on this forum to support those strategies. So while you or others don't have to like my views or offering, I cant ever be accused of being opaque or seeking to avoid scrutiny :)

    On the subject of Orange - I remain very positive that it still has several good years of upside for rental growth. The population pressure on land supply is not over yet. There are lots of jobs coming in the next 2 years and those workers will bring families and children with them and because of the acute lack of available lots to build on, in my view, rents will continue to perform very well.

    Nothing lasts forever- but I would point out that Orange has been the single most stable resi property market in Australia for over 20 years. It has suffered only ONE year of negative growth in 20 years . This is another reason why I believe that it is a solid, reliable place to own and pay off a property and retain it's rock solid rental income in retirement
     
    Last edited: 15th Apr, 2019
  5. dabbler

    dabbler Well-Known Member

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    I don't care about what the stats say, which is what you seem to be going off.

    It was not very long ago that a LOT of people were bleeding money and lost a lot, I know what your response will be, cause you have your blinkers on. Most stable...lol...at what, being below average ? It has had a long awaited spurt, ask others who have or hold in Orange.

    I have bought in West, and I am sorry to tell you and maybe enlighten some of your students or disciples, that many places were bought not long ago at less than prior purchase price, and some got really smashed, and you and your buyers are candidates for this if it goes south again, as it has before.

    I find it comical, your the debt reduction gladiator etc, cash cow seller, blah blah blah, but, completely unbiased lol....Orange is what it is, a good place to live if choosing the country, it has had a growth spurt, rely on it continuing would be madness, or maybe extra shade on the rose glasses ?
     
    Last edited by a moderator: 15th Apr, 2019
  6. euro73

    euro73 Well-Known Member Business Member

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    You are having what appears to be a never ending amount of trouble comprehending what I have said over and over . I put together deals that can handle P&I and pay themselves down . Growth isnt necessary to pay them down . They pay for themselves because they are Dual Occs and generate 2 rental incomes not 1. I think I’ve been more than clear about that about, I dunno - a thousand times ? It’s really very simple .

    But I’m glad I’m at least able to provide you with some comic relief. giving back is important .
     
    Last edited: 16th Apr, 2019
  7. euro73

    euro73 Well-Known Member Business Member

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  8. euro73

    euro73 Well-Known Member Business Member

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    We'll just keep doing what we do.... and better than the average bear.

    Here's our latest Dual Occ Cash Cow. Those rents are not too shabby, thank you very kindly.

    Screenshot 2019-05-14 19.56.01.png
     
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  9. Hayes

    Hayes Well-Known Member

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    Very new to this but looking to invest in orange this time next year.

    Will be looking to grab a 3 bedroom for less then 250k and then just renting it out.
     
  10. dabbler

    dabbler Well-Known Member

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    At 250 right now, your going to be looking at the cheaper areas & an older place, but you will prob get a decent return, and my experience is the cheaper older places with larger blocks rent much quicker and easier than the more expensive when a normal rental market, and, TBH, the place I have had the most issues with is in good spot and much more expensive, had 2 bad tenants & prob a combined vacancy of 10 months plus if added up over years and time to fix issues tenants caused as well as much longer to rent out...

    If you can stretch a bit more, you may get a place under 20 years old with good block for not a lot more.

    Stay well away from the new places with grannys the guy above your post is pushing IMO, you would be far better off with 2/3 cheap places with a decent private block of dirt under them.

    Many parts of the East side have become desirable. That is where you will be fishing.

    Whether old or new place with the tag along granny, I honestly feel you have missed the growth, but that will also depend on the outcome on Sat and also if they meddle with APRA to lower the lending bar (which also may mean money starts flowing to the cap cities more so again though).

    Good luck, it is one of the better country areas to live, that is for sure.
     
  11. euro73

    euro73 Well-Known Member Business Member

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    Never mind that the dual occ's hold up under P&I terms and pay themselves off in 20 years. That's just a minor consideration in a world where you're going to have to pay P&I at some point......right? :)

    Instead, lets run with the advice of old mate, who has conceded previously that he struggles staying above water - even under IO terms.

    Whatever you (or anyone else) are considering buying - whether its regional, metro, resi or commercial.... whether its 250K, 500K or $1Million.... make sure you can meet your repayments under P&I. If that is something you can deal with from your hip pocket, all well and good... vanilla yielding properties may work for you..... but if it's not something you can deal with ( and there's no shame in that - its a problem for most) then think about the merits of cash cows, in whatever form suits your particular budget. I happen to like regional Dual Occ's as cash cows because they allow for relatively inexpensive purchases ( sub 600K) and they produce great cash flow - sufficient to generate over 8K net surplus under IO terms or @ CF neutral under P&I terms.... which becomes CF+ within a few years as the debt comes down ...... and they allow you to hold multiples while staying under land tax thresholds. But they arent for everyone.... and Old Mate certainly doesnt like them. That's old mates prerogative of course ... but old mate criticising dual occ's might hold more water if he could keep his IO head above water with rates at 4% ish...

    Good Luck with your adventures in Orange. Its a really nice regional centre
     
    Last edited: 15th May, 2019
  12. dabbler

    dabbler Well-Known Member

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    Old mate yourself old donk....

    My places smash yours for return, and, have appreciated in value far more than any new build will from now....which will depreciate.

    I say stay away simply because of what most of the market demands, nothing to do with old donk and the ad nausea message, even though it is getting long in the tooth.

    You will never be balanced in your view, it is totally corrupted by your drive to sell people reading the forum your "stuff", quite clear that is, you will disappear from Orange once they are not worth selling, and be on your next marketing campaign, your not different from others who have been here to shoot fish in a barrel.....

    None of your calcs are done properly, nor do you allow for the very real issues most mortals have with tenants...., every cent that is spent on a buy has to be in the calc mix, and your returns are not so flash esp if labour take your neg gearing away.

    We all can pretend how good things are, but anyone who believes it is so easy will find out the hard way that reality gets in the way of the best plans.

    If you have a lot of cash on hand burning a hole in your pocket and it is not in the calc, sure....but so then it would apply to the much better proposition of free standing dwelling on own title.
     
  13. dabbler

    dabbler Well-Known Member

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    lol...

    20 years now.... ha ha ha ha ha ha ha

    If I have places that calc ok on P&I, you can bet some tenant will do something, or something else will happen, that brings the plan undone....

    You must be one lucky SOB, or at least a SOB....I give you that.
     
  14. dabbler

    dabbler Well-Known Member

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    Do not buy place/s with granny flats, old, or new. That is my take, been quite clear on that.

    The market demands are for 3 and 4 bedders on good blocks that are up there or near, quarter acre with decent privacy and access.

    If you want multiples, look at the units in the areas where units are actually always in demand, and then, buy what is most in demand. They always look over priced to me, and that was from before any of this growth of recent.

    Seeing it is a boom atm, ignore the above at your peril, Orange is not Syd or Melb, most people leave caps looking for lifestyle AND space....I think that should be obvious, but, the rusted on locals are even fussier.

    You will rent anything new for the first few years, prob to someone moving or building themselves, but I would be looking at what happens when older and or more normal market returns.....

    I tell you that with nothing too sell.....and I am ok with admitting I could be wrong, so do all your own checks if buying into any area.
     
  15. beachgurl

    beachgurl Well-Known Member

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    I've just accepted an offer on one of my Orange cheapies and thinking of giving the second one a crack before the EOFY too. Theyve served me well and now it's time for a newbie to get their hands dirty.
     
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  16. sash

    sash Well-Known Member

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    Ditto...well said Dabbler.....the calcs are like lipstick on a pig.

    At the end of the day it is still a pig!

    100% agree about a freestanding home...who the hell builds units in Orange...what rubbish....

     
  17. Hayes

    Hayes Well-Known Member

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    I guess it makes sense.

    Ive found property around 160k im interested in (however id be making a lower offer)that would rent for around 220 a week as . Repayments appear to be 578 a month which would leave just over $300 positive cash flow. Im assuming though id be using most of this on maintenance over the year.

    Still not quite sure if this seems like something worth pulling the trigger on or if there is better first investments elsewhere for such a low entry cost to the market.

    Either way I'll keep my eye on the market in orange over the next year and make a better decision after that year.
     
  18. Hayes

    Hayes Well-Known Member

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    My question is, in areas like glenoire how much value can we add to a property to raise the rent. Is there a way we could get a 3 bedroom 1 bathroom to 280?
     
  19. Hayes

    Hayes Well-Known Member

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  20. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Not saying its a good or bad investment but your numbers show that its cashflow positive by around $3,500 per annum however it doesn't seem like you have factored in:

    1. Council Rates ($1k-$2k - not sure but maybe someone of the guys here can confirm)
    2. PM Fees ($700 p/a assuming 6%)
    3. Maintenance Fees (lets assume $1k)
    4. Vacancy period (there isn't a hard and fast rule but I use a vacancy period of 6 weeks per annum in my calculations so thats $1,320)

    So the above is around $4,000 p/a which would be break even.

    Its great that you have factored in the total cost of the property including stamps for cash flow calculations purposes.