VIC Where to buy +ve cashflow property, and why?

Wondering where the best place is to buy positive cashflow property in VIC and why?

 

Melton.

 

Barraba

 

Doveton

 

Because

 

I'm interested in your reasons for Barraba? Do you have any properties there?
What is the industry there? Is it just feeding off Tamworth?
Thanks.

 

Why do you want positive cashflow property?

 

Because they would rather make money each month than the alternatives.
Maybe the list of criteria needs to be expanded

 

Small towns with few people.

Really though, the major and smaller regional centres in the lower price range $250-350 is where much of the cash flow positive stuff is that you would actually consider buying.

Northern suburbs of Geelong, parts of Ballarat and towns like Mildura

Also high risk student housing and studio shoe-boxes in places like Carlton (I'd avoid)

Remember, the lower end cash flow positive properties quickly become neg cash flow as soon as a large maintenance item comes up. New hot water service etc.

And while the best cash-flow opportunities are in tiny towns, there is no growth and few tenants. Stick to the medium sized and large regionals with multiple industries IMO. And look at places that provide opportunities to value add

Last purchase was cash flow positive in Ballarat with 6% yield.

 

Moranbah

 

I can understand wanting to make money each month, but if that is the only reason then its a poor reason and somewhat shortsighted imo, in terms of building wealth.

 

VIC?

 

Not really, think about income, what you're really using to make wealth and serviceability.

Property in and of itself isn't a great investment, low capital growth and low yields compared to other investment classes (i.e. shares). The reason property works is because you can safely gear so much. You can borrow and take the returns on the banks money which makes the low growth asset worth it. Thus what this game is really all about is access to finance.

Now if you have a massive income and you can afford to service plenty of higher growth negatively geared property, then fine: why would you concentrate so much on cash-flow? You make a good pont. Particularly if you are millions away from any serviceability walls.

However if you're on a low income: You hit your serviceability wall fast and you struggle to make ends meet. The sacrifice is too much. Here cash flow is important.

 

@Beelzebub

That's why i underlined 'only' reason. I know people with very strong income/seviservicibility and a great deal of equity. Pre sydney boom they read 1 book plus the advice of a friend to only buy property that returns a weekly profit. They bought 2 properties in areas with poor fundimentals but a higher rental yeild returning then about $100 a week ($50 each property).

Fast forward 2.5 years. No capital growth and made a profit of roughly 10k minus some maintainence. They could of made more than 500k if bought correctly according to their situation.

That's why i said if wanting to buy positive cashflow property for the only reason of making money each week, then imho it's a massive mistake in terms of wealth creation.

 

Before this turns into another thread on cashflow vs growth. I'm assuming the op is referring to cashflow properties that have growth potential as well. I've never met someone wanting to buy a house for cashflow only.

Check with Margaret lomas, as she tends to target these areas.

 

Oh there are heaps. All around. They believe that all CG Australia wide is speculation only.

There is speculation, and then there is speculation.

To combine both as the same level of risk, is another miscalculation imo.

"There is no shortage of land in Australia, but the restrictive planning system has created shortage of suitably zoned land in most cities. That problem is aggravated by a very long and expensive approval process". Lyn Shaddock.

That is one of many very important factors that makes demand for Australian property so strong imo.

 

in vic - one place guaranteed - Melbourne CBD apartment. (though next to no growth or limited growth) great for SMSF and someone who wants to fixed income regularly. Why? demand for rentals are high and constantly growing - most ppl who live in CBD work in CBD - either in variety of jobs cleaning, accounting, hospitality - no transportation cost (due to free tram zone) and time savings in terms of travel time.

 

@Leo2413 Why not just answer the OP's question and start a new thread about your views on CG property? I'll read it. Try to include some of your own examples /a little transparency for the sake of credibility.

 

Leo you are a funny bloke.

 

It has an effect, otherwise there would probably be high vacancy rates as well.