Positive cashflow base- rural dual income properties?

I will be a first time investor later this year, so I have been reading everything I can, listening to as many podcasts as possible and am generally a new student of property investment. I'm Earning 6 figures in the bush, and buying a PPOR does not make sense in this area so will be renting for the next few years. Also qualified/experienced in town planning. Currently have no kids, and minimal overheads.

My current thoughts are to build a positive cashflow base, through 3-5 ~$250,000 properties with predicted ~2-5% growth and 7.5%+ gross yield purchased over the next 5 years. These would be buy/hold for the foreseeable future. I would use this base to support property development/ risk taking in the future, without impacting on lifestyle.

Currently I can't go past dual income properties in rural areas, these appeal as they, in my mind offer security- you only require 50% occupancy to pay the bills, overheads are less than two properties and the mindset of rural Australians is changing- many will accept higher density living.

I'm looking for thoughts on the strategy, in particular rural dual income properties.

Thanks.

 

I'm all for dual income properties but not in the bush with projected 2-5% CG. Even at 7.2% CG it takes 10 years for to double in value........Having said all that, it depends on your personal goals & SANF.

 

Do you mean rural or regional? There's plenty of discussion here and in SS as to why you should pick places with a decent sized population and a multiple-industry economy. Rural Australia would be too risky for me. Parts of regional Australia have worked for others, and @euro73 is investing in dual occ properties in Orange at the moment I think. Maybe have a chat with him?

It's an interesting on-paper proposition, but I'd need to understand more about Orange's economy before I put my money there. I know that Newcrest are expanding their Cadia Valley gold mine, so construction work brings in $.. but I'm not sure what else is going on there.

 

@Orange - University campus expansion. Hospital expansion. A lot of health workers moving to Orange as it becomes the "Westmead" of the central west.

The new inland rail everyone is "leaking" will be a big ticket budget item next week will also be a significant boost to regional NSW. Particularly Orange, Bathurst, Parkes, and Dubbo for example.

I dont think most people understand how well the larger regional NSW towns economies are going - and its starting to show up in rental yields, which will flow to prices...Orange saw 10% growth last year. Bathurst saw 9% . Not exactly Sydney or Melbourne, but they outperformed Brisbane, Adelaide and Perth easily. Low entry points compared to cities. Much lower stamp duty because of the cheaper land costs, and you can hold several more properties within the NSW land tax threshold. Renters feel the pressure as demands pushes up prices | Photos

 

I've set a pretty broad search, but these are two that spiked my interest.

West Wyalong (pop 3k) NSW Shop/unit (2br) $160k, real estate claimed 'around $350pw' combined rent. GY >11%.

Another is in Wellington (pop 5k) NSW, 230k 3br/2br units combined rent $400. GY ~9%.

I think I'm being pretty optimistic here- risks being in population/narrow employment pools. But as I said Im just a student, looking to learn!

 

I Like where this is going. Localised income diversification and yield!

Free Suburb Profile report for West Wyalong NSW (2671) 20% capital growth last year. Not so much over the longer period but timing could be everything. Any ideas as to why?

 

Probably cause 3 properties were sold over the period compared to 1 the previous year?

 

subscribed

 

Oo harsh! From 50 to 85.

Largest cereal growing area in NSW. Muesli bar sales up? Avocado smash on sourdough? Annual shows as a tourist destination? Historic architecture?

Inquiring minds you know!

 

why would you go regional if you can get 5-6% dual income yield in western sydney?

 

Affordability?

 

I would be very careful with dual occ in rural regionals, even in the larger ones, I think there is potential to flood the market with just a few of the forum members, maybe less so if in the mountains or maybe Lithgow.

People like houses , not attached and large yards, even if they are a duplex/semi only sharing one wall, the rental falls off a cliff usually compared to a stand alone house with larger block.

So make sure you do something the market will want.

 

Don't laugh, they include surrounding farms and lifestyle places cause many of the shonky agents will not list them with the real location.

It also does not separate all the sales & good Ag land costs a motza in many areas.

 

Would love to find one - Sydney houses with approved granny flats are priced at low 4s. I will pay a BA who can find me a 6% in Sydney today

 

One recently sold in rooty hill and another one for sale now