VIC Vic Regional IP for under $400k (Traralgon, Ballarat, Bendigo, Warrnambool)

Hi all

I am looking to make my next IP purchase and would appreciate some feedback.

Currently I have two IP's in Frankston and a short term holiday rental in Phillip Island (Cowes).

They have all done quite well regards capital growth and I am looking to shore up my property portfolio with a couple of cash flow positive properties as cash generators to assist with future purchases.

As such for my next IP I am looking for a cash flow positive property in a large regional centre in Victoria for around the $350 to $400k mark that would rent out for around $360 to $400 a week (I have found you need a rental return of at least this much just to cover fixed costs such as council rates, etc)

The four areas I have narrowed my search down to are as follows

1. Traralgon
Pros.
- Good rental yield on houses (5.2%)
- Not too far from Melbourne (2 hours)
- Decent stock available at my price point

Cons.
- Historically has been poor regards capital growth
- Closure of Coal Power Plants will have an uncertain effect on economy


2. Ballarat
Pros.
- Close to Melbourne (1 hour)
- Historic Town with tourism industry
- 3rd largest population outside of Melbourne and Geelong

Cons
- Not great yield for regional centre (i.e. 4.4% for Wendouree)
- Might not get much at my price point


3. Warrnambool
Pros
- Beachside with tourism / lifestyle potential
- Decent yield 4.7%

Cons
- 3 hour drive from Melbourne
- Might not get much in my price range


4. Bendigo
Pros
- Decent yield (i.e. 4.7% for White Hill)
- Not too far from Melbourne (2 hours)
- Large regional centre (4th largest)

Cons
- Might have already missed the bus with capital growth?


Currently I am leaning towards either Traralgon or Warrnambool as I feel both of these locations offer good "liveability" (Traralgon being in Gippsland with nice scenery / access to Gippsland Lakes and Warrnambool obviously being by the coast)

Happy to hear anyone's feedback on the above.

Which of the areas above do people think has the better long (10 years plus) capital growth potential?

Any other regional areas I should be including in my search?

Many thanks!

 

Hi @malleybull

Look into Bendigo (only 2-3 burbs might be worthy to invest)
And Warrnambool (still some growth to be had).

Look into Shepparton and surrounds as well.

Regards
Ashish

 

Hi @malleybull,
Having read through a few other forums I understand that Traralgon is flying at the moment, properties aren't staying on the market for too long.
Given its affordable entry point, I'm considering the region (Traralgon/Morwell) myself for an iP as I can see long-term good growth.

 

What I like about the area is that the yields are still good.

For a $360k property you can get $400 a week rent which covers pretty much all the costs.

Once this lockdown V 4.0 is over I will be heading down that way to inspect some properties

 

What are everyone's thoughts on this property?

It is near the schools so I assume it is a decent enough area?

Also seems to be pretty close to the shopping complex.

https://www.realestate.com.au/prope...ge=rea:buy:srp-map&sourceElement=listing-tile

 

Just check that it is not in the flood zone...

Victoria weather: Man found dead in floodwaters, Gippsland town evacuated, thousands face prospect of no power for up to a week

 

Alreasy checked with a mate who lives in the area and he confirmed it is well out of the flood zone.

He told me to stay clear of anything near Traralgon creek for obvious reasons!

 

Malleybull, horrible to me to say, but due to the recent flooding event, in Traralgon there will be massive demand for rental properties in the short term.

 

What does everyone think about the ranking of the Gippsland suburbs on Homely?

Best suburbs in Gippsland | Homely

 

Moe seems a bit high for me.....

Other rankings are around the mark although really Cowes and San Remo are a different category (beach resort) than towns like traralgon, morwell, Churchill, etc.

I grew up in East Gippsland (around Maffra m Sale) and for me the Puck of the non beach towns would be Traralgon if I had to pick one to live in.

 

Hi all, is west end an okay side of traralgon?

Im currently looking at the below property.

12 Phillip Street, Traralgon, Vic 3844 https://www.realestate.com.au/property-house-vic-traralgon-136311906

 

West End in Traralgon is one of the desirable areas. However, would suggest to check with the agent first as to why that property has been on market for more than 2 months now, especially given that properties are not staying for that long on market in Traralgon these days.

Good luck!

 

Thanks swaugh!

 

Ballarat and Bendigo will be more pricey.
For 300-350k I'd look at Shepparton, Wodonga and yes Traralgon too.

 

Can anyone provide any more insight into Shepparton? I'm looking for an IP in regional Vic and while Shep looks ok due it's size and proximity to Melbourne, there's plenty of bad reviews of the place along with it's previous slow growth which makes we wonder whether it makes a good investment, outside of the covid growth most places have had over the past year.

 

Hi Gerry.M

If you’re looking for value in the Shepparton area, then there’s still some opportunity, but they are quick to be snapped up and becoming rarer as this regional boom continues. Shepparton has had a bad wrap for quite a few years. However, there has been a boom in infrastructure spending in the last 3 or so years mainly due to us moving to an independent state seat, rather than the previous very safe coalition seat.

Shepparton is also grossly underpriced compared to other towns that are less than half of its size, and rents are very strong in the region.

I was able to secure an off-market property on behalf of a client for $233,500 which was a 3 bed 1 bath brick veneer. By the time we had settled on the property, it was around $280k and now it would comfortably have a $300k+ price tag in an unrenovated state. This is all in the last 4-5 months.

I wish you every success with your search for the right property!

Regards,
Luke Jorgensen

 

Hamilton is at 8% annual growth! Crazy for a regional

 

Good choice! Data looks pretty solid in terms of recent capital growth and current rental yields.

 

it certainly does!!!!! when i saw an opportunity i was yep lets go for it!!!!

 

What does everyone think about Sale in Vic?