NSW Orange, NSW

That's a good property at that price. Most low end properties under 200K need a reno both to the kitchen and bathroom. To get something for under 160 for a 3 bedder it would be in a bad condition or the seller is desperate as there is nothing at that price on the market.

It all comes down to the street as to whether you could up the rent. There are some that now have some privately owned stock but are still most DOH. I doubt that anything will reach the high $200s per week in those locations. But then drive a few hundred metres down the road to a better part of Glenroi and the percentage of DOH is lower, more owner occupiers and you never know. If you could squeeze a 4th bedroom in you may have a better shot at a reasonable increase.

 

Are you buying for equity or cash flow? As Shahin said, you'd likely be neutral as his breakdown of costs is pretty close to the mark. If you bought in the 170s and spent 5-10K on a cosmetic touch up you could likely get the value of the property up over 200K and create some instant equity.

 

here is the thing....

You must calc all money into any buy.

On this forum, many ignore, deposits, stamps, other costs to buy...

But

They also ignore insurances, vacancy, damages, unexpected maintenance, problems with builders and warranty, ever increasing rates which have gone up 25% or more in a few short years, and that is ignoring what can happen if you land a poor tenant, which is a real possibility with a lot of the PMs...

Also it assumes a stagnant, falling, or at least not normal interest rate.

All the new building atm is not so much different from what has happened in the past it seems to me.

Keep at top of mind, unexpected things can have you behind the 8 ball, and having an unusual property in a "usual" market may mean you cannot offload without a loss.

 

Pffrrrtttttt....

You should get into the property sales business, then you can ignore such things, and many more......lol

People rarely calc the all in money, that means every cent and or where the use of cash may be costing elsewhere......

Rates are all 2k+ now, in some council areas, they have a min payment, so even if your little shitebox has no value, council slug you a set rate......this is significant, it has gone up a lot in last few years....a real lot in many places, Orange will have you at about 2k for rates, plus water.

You wont get anyone for 6% or 700 bucks, if you pay a grand, or more, you can bet they will do a poor job, most of the PMs will not do a good job at double the Syd price, and I see so many that pass off the prob tenants I have had to someone else, and a good chunk do not do checks...so good luck.

Maintenance will depend on your place and age, but do not underestimate how many jobs that are 2 or 3k+ are not needed, basically, trades mostly send a go away price, so if you have no clue, get ready to take a beating here as well....unless you have granny flats, I am told they are immune from the need for scrutiny.....

Vacancy, well, nah, your wrong there, you will actually find the cheaper places in the areas some say are no good, rent quickly, often only a few days vacant, but the higher you go, longer you wait, I have had 2 months plus.

And then you have the tenants, and I wont say much apart from the worst cost wise have been in orange in the better area, I would say that is just luck, but maybe not too, I just cannot say at this point.

Now, on the other hand, if you apply sane expectations, buy well, buy what most people want in the area your buying, you will prob do ok, but keep in mind, the market has been marching for a while now, it will not keep this pace up forever, so be careful how you spend your money, if you have heaps of cash and income, you can ignore many of the realities.

PS I really hope I am wrong and it marches ahead for years, but even I have noted the few people I know here who had places have started taking some money off the table.

 

Correction, unit/s would be ok in the right spot, he is doing grannies so are stuck on the one title....i.e you better get ready to take a big one from the back if you need too sell any time soon..or the next decade or so !

Rental market is doing well, I feel a lot of people renting anything while they build or find first home, if from Syd etc, of course they prefer the new places, I would do same prob, they are not going to ex housing or old war areas, they want to wear out someone elses place as they find own or build own, exactly the same as what is happening in many places in QLD right now, know a bunch of people who rented new places as they wait for own to be built.....then what ?

 

Glenroi is more than just a housing area, you prob have very cheap rents to quite expensive, depending on property and location.

A decent 3 bed 1 bath in a decent spot would have been at that rent for a long time, if your talking ex housing, well, again, depends on where and property.

I do not think your really going to be getting deep discounts on ask price atm, maybe you need to tip in more, maybe beachgurl and others can advise on that, if they had to discount or got ask or ask +, I know some agents put a high price, but most seem to sell ATM, so....

I am not trying to turn anyone away, but you have to do your own numbers and assume the worst, do not consider the current sales prices and rents as "normal", however the cheap end of the market, as elsewhere, is always more affordable, and, more people can afford the cheaper rents, may not apply so much right now, but when normal or economy hurting, it will matter, I would rather have 4 200 a week rentals than 1 800 at that time. But watch the outgoings.

 

Thanks so much for this response I am new to reql estate so break downs like this are definitely super helpful.

I think a break even for me would be quite decent for a first property as I want to hold onto the property for the long term and allow them to pay themselves off.

 

Dabbler mentioned insurance which I forgot to mention and also the council rates are $2k so I dare say that will take you into negative territory.

I don't necessarily think that a terrible thing but definitely need to also look at the capital growth side of the equation.

 

Thanks for both of your reaponses!! Super super helpful. I think spending the extra for some touch ups are a great idea, I will be buying for equity, as it will be my first ourchase ever I just want something that pays for itself and gives me potential for real growth in the next ten years. I feel like orange is a good entry point for me in the price range I can achieve the quickest so that I can get to market amd begin a portfolio as sokn as practically possible

 

Thanks! Definitely some things for me to be mindful of moving forwards. I live in Sydney so in terms of finding contractors that is my fear, I think I would want to create aome networks down there before making any purchase. I certainly do not want to be paying double sydney prices for small are pointless repairs.

I am young though (28) and am not against being hands on and making the drive to fix things myself (within reason)

 

I drove all around the state many times and even interstate to do things, but not for minor jobs.

Keep in mind, this issue exists everywhere, for all rentals, I think most are blissfully unaware when being taken for a ride, there are of course decent trades as well, so prob need to keep an eye & get a decent PM, which can be hard.

You also cannot win all the time, no matter what property, but it is a good idea to keep finger on the pulse.

PS I cannot see where that place is, but it seems cheap, even most of the poor ex housing locations seem to be 200+ now, you find up here some people get pricing wrong, I would go have a look, and look into if there is a caveat.

 

Yeah that makes sense,

That property appeared to be on the north side of orange which interested me.

Will definitely start doing viewings but for now im just trying to practice spotting a good deal in my price range.

Then again im not set on orange. Im open to all areas within n.s.w in my price range that I could make a good investment

 

Why only NSW?

 

I want to be more hands on for my first property and be able to have quicker access if need be without having to catch a flight.

 

In whatever area you choose, definitely find yourself a tradie network if you're renovating. A few years' back I need one of my Orange houses painted. The first painter quoted 19K for internal and extternal for an ex DOH. I ended up hunting down a school mum I knew from a party whose parents live there and asked them for a painter rec. Ended up with a "locals" price.

 

Another Dual Occ ready to go. Just waiting on turf...

 

And here's the next one ...

12a Young Street Orange NSW 2800 - House for Rent #426760606 - realestate.com.au

12 Young Street Orange NSW 2800 - House for Rent #426760698 - realestate.com.au

 

Photographer couldn't be bothered to move the hose?

Who picked them tiles?

 

I wrote this on May 23, 2018- just over a year ago. Since then, rents have actually exceeded expectations and have been hovering at $685 for the Dual Occ's for well over 6 months now.... and now it appears they are about to hit $690 , based on the latest rentals I listed just above

You'll hear the usual naysayers like @Anthony Brew or @sash and others criticise the Dual Occ concept and regionals, but they have been spectacularly wrong so far- at least as far as MY dual occ's are concerned in Orange, Kelso (Bathurst) and Raglan (Bathurst) . You'll hear them go on and on about the granny flats being wrong for the demographic, but they continue to be spectacularly wrong as the Granny Flats are where the lions share of the extra rental yield is coming from. 2 years ago they rented for $220 per week. Today they are getting $255 per week. At the same time the houses have increased from $420 per week to $435 per week...so rents are increasing everywhere, but the Granny Flats have been on turbo. . You'll hear the naysayers go on and on about how you cant ever get growth in regionals, how regionals are in the middle of nowhere , and how they are "rubbish" locations that only idiots buy..... yet Orange has been, and remains, THE most stable real estate market in the country over the past 20 years and has a low vacancy rate and several thousands high paying jobs in Government, Medical and Mining coming online throughout 2020 and 2021.

I'm not suggesting these properties will shoot the lights out with growth. I never have. I have always, always always been about generating cash flow and using it to retire debt. Same goes for the NRAS products I worked with previously. Cash fow for debt reduction has always been the prize. Growth has always been the bonus, not the prize. But what I have said over and over is that MY Dual Occ's will provide a super reliable, super steady income stream and pay themselves off under P&I conditions within @20 years ( perhaps 15 years if rates come off another 50bpts) . And they only need to give you an extremely conservative 50% rental growth over that 20 years to leave you with a Gross income in excess of 50K . Two of them gives you over 100K Gross, and three of them gives you 150K Gross. Better yet, this is all achieved while staying well under the NSW land tax threshold of 692K. Yes - you could hold THREE of MY Dual Occ's and stay under the land tax threshold, meaning for @ 1.8 Million invested, you can go 20 years with no growth and still retire debt free with over 150K Gross income. And if they outperform zero growth and 50% rental growth, ( and they probably will, but thats speculation, not investing) you may well do even better.

GIven that you can achieve this within 20 years and for 600k ( 1 Dual Occ) , 1.2 Million ( 2 Dual Occ's) or 1.8 Million ( 3 Dual Occ's) respectively, I would put it to the naysayers that they are simply wrong . Some of the naysayers have been investing 20 years, own over 30 properties , carry way more than 1.8 Million in debt and still havent got these income levels...yet forum members consider them to be accomplished, elite investors. I say otherwise. It's undeniable they are wrong about the demographics and demand for the product. They are wrong about the strength of larger regionals. And in the end, in spite of all their keyboard warrior stuff, I very much doubt they could come close to articulating a strategy that can deliver 50,100 or 150K income for 600K, 1.2 Million or 1.8 Million of debt, all self servicing at P&I , and requiring ( I said requiring, not delivering or producing ) zero growth .

 

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