Regional Property

Who here invests in regional property, towns of 10000 + population or under?

I prefer regional as when I started out, it was/still is a lower entry price, less deposit, less competition and attractive to manufacture equity and positive cash flow.

Buy a few of these when starting out and once a foundation is built, buy some cap growth properties in the cities, start developing/flipping and so on.

There are risks such as longer vacancy times, longer selling times, expensive tradies, limited capital growth (I believe Cap Growth is bonus, well for now and prefer to create my own growth) and so on.

 

My wife and I have 2 coastal region IP's, no debt. They have proved to be a great source of passive income. Certainly not the same CG's present as in capital cities, but a nice money spinner all the same.

 

I have a few regionals but all in locations with a population greater than 30000.

 

Just bought in Parkes. Popn about 10 000. No buyer's remorse when I see those dollars stacking up from day 1. Just have to find the time to get in and renovate. I think the main problem is the appalling lack of decent property managers.

 

Have purchased in Bathurst & Wagga NSW large regionals. No remorse at this stage. Great cash flow from day 1 and Bathurst has provided strong CG and Wagga a small amount

 

I've bought numerous in a large country town this past year (population above 10,000). They've all been cashflow positive so in that respect I've been quite happy.
I've had some issues with lenders financing against the properties, but I pushed through.

Not sure if I'd do it again, but no regrets yet!

 

Just purchased in Ballarat. tenanted with a 6% yield, hopefully I will get some growth too.

 

Were the issues related to serviceability or location?

 

Just talked to my agents in Albury...it would seem the locusts are heading that way also.

The economy there is going well and investors also like the reasonable prices. In his words we have hit bottom and now on the way up....

 

Do you mean real locusts, or investors?

We had a locust plague up in Deniliquin back in the '70's - I remember cars were pulling over because;
a) Couldn't see
b) were overheating due to locusts clogging up radiator grilles.

They ate the whole golf course!! - except for the greens, for some reason.

Farmers lost all their crops - it was terrible.

 

In this the locusts are Sydney investors......

 

Some would hope these Locusts would end up clogging up radiator grilles also! Haha!

 

Seen reports of Essential Energy cutting 1500 jobs around regional NSW (inc Bathurst) and not sure how these regional job markets will fare in next two years.. how do you rate places like Lithgow/Bathurst or Orange/Blayney corridors for IPs? (New member, property investor since 2005, looking outside of Syd for first time) cheers

 

Just posted this elsewhere:

We picked up an 2 bedroom unit in 2528 a few years ago. The opposite unit which is identical in all perspectives only its in its original condition was just sold after two days for $335.5K with over 4 buyers bidding.

Working on that sale, our IP has increased by over 85% in under 4 years which makes the growth comparable to our Sydney PPOR.

 

Bought in Sanctuary Point NSW (near Jervis Bay), lovely spot.
Don't regret not buying in Sydney, this one had CG just as impressive (over 36% in less than 2 years with a minor reno).
Over 6.4% yield from the start, now over 7.6%.
Do have to be careful with tenant selection around there though.

 

Over the years (in the last decade) have had a lot to do with Nyngan, and Cobar.

Will never do regional again, unpredictable, seasonal and slow as hell to move. Great when you have a team knocking over renos on a daily basis and flipping due to the latest growth trend or mining establishment, otherwise not something I will go back too.

I have never regretted moving on from this strategy to a longer term CG strategy in Metro cities.

 

In my opinion all these towns/ cities are good to go ... in a couple of years. Bathurst always strong. Orange with high vacancies. But beautiful city which went off a few years ago and will do again. But don't be fooled by looks. A lot of roughians there. You need to buy something decent. Best thing to do is buy something real cheap make it nice and add your friendly smile to the neighbourhood (diy gentrification) or buy a nice house in a good area. Have buffer for vacancy or keep rent low.
Blayney. No. Well do your own research.
Lithgow not yet.
I intend to renovate my Parkes house soon. If you can get something that needs a reno and you have the time and energy, you can get a bargain in any of these places. I reckon they're becoming the new outer suburbs of Sydney. But I'm a nut case. Consider Forbes too but be careful of flood zone and demographics.

 

Nyngan. No thanks. 100 per cent tenant issues I imagine.
Cobar. Mining town. Outback.

 

Your right on both counts. The reno, flipping at the time was a great strategy for what we learned, very profitable, a lot of work, serious markups when the demand was on, too heavily reliant on the mining sector.

Very happy to have moved on with different strategies and to be past that part of our lives.

 

Well good to hear you made some do-re-me at the time. Made the most of the opportunity at the time by the sounds of things.