Hi I’m new here and looking for some advice. Thank you in advance!
My partner and I are looking at buying our first IP. We are from Melbourne and are looking at spending under $300k. Our attention has been caught by Ballarat. We would be looking to buy an IP in the Ballarat Central/Soldiers Hill/Ballarat East area as close to the CBD/Train station as we can get. My main concern is the potential for an oversupply of rental properties from the shiny new estate developments in the outer suburbs.
My reasons for considering Ballarat are:
– Population growth is forecast to grow by around 46% by 2036
– Vacancy rates are low
– University and good schools that are becoming appealing to Melbourne families/students
– Regional Rail Link completion will make commuting to Melbourne for work very achievable
– Multiple industries supporting economy
– State Government investment e.g. Ballarat West Employment Zone, Regional Jobs and Infrastructure Fund, upgrades to schools, upgrade to Ballarat Station precinct.
– Potential for Vic Roads, and perhaps other APS agencies, to launch offices in BallaratWe are young (25), have a PPOR that we purchased in 2013 which we are on track to have paid off in 11 years, and our IP strategy is to buy and hold with a view to build a portfolio to help self fund our very far away retirement.
Would love to hear what more experienced investors think (I am prepared to be told that I am very off the mark with what I am thinking…) ANY advice is welcome. Thank you.
Hi Emma,
Welcome to the site.
I think you are very good with your analysis. Although the area is only half the story. You need to find the IP you like and then think about its potentials and performance thus far. Again, firstly location location location and secondly, you make your money when you buy not when you sell (this is because you don’t know the personal and wider economic circumstances that will happen when you sell. there is a good chance that you cannot sell at the price you want). So make sure you buy low.I personally would not mind about competition. If I have the best location in town, IP is well looked after, tenants will look at my IP. Your analysis also says low vacancy rate ;)
I know this is not much help, but I think you are just having buyers cold feet.
Good luck in your search,
CattleyaCattleya
Here to learn the ropes of property investing & share knowledge, not trying to sell anything at all.
Thank you Cattleya! I am quite a conservative person naturally, so yes, definitely feeling some cold feet! But I’m sure I will overcome that. We’re actually going to go into Ballarat tomorrow and do some inspections, so it feels like a step in the right direction to see if the area is right for us, and then we will wait for a good IP to present itself :)
Thank you for your advice, much appreciated!
I have one property in Ballarat (Golden Point) and my PM told me the vacancy rate has been increasing in the last 6/12 months, following lots of investment from Melbournian there…
I have an IP in Alfredton – bought about 15 months ago. It was empty for a couple of weeks between tenants and it certainly felt like a ‘tenants market’. So much different than a few years ago with my other IP where I had 20+ applications in a 15min showing. Having said that, it rented fine, but I can imagine that a poorer positioned IP would struggle. I’m not seeing any increase in rents or capital in the short term, so unless there is something real special with your purchase you’d need to be in it for the long haul.
I bought for all the same reasons as you.
Thank you for your comment, it’s good to hear from someone with an IP in Ballarat.
We’re definitely planning to be in it for the long haul, we would hold the property for at a minimum 10 years, but most probably longer, to take advantage (hopefully) of the growth expected in Ballarat. Area wise we have been looking at established homes in the central/east of Ballarat.
Hi Emma,
Sounds like you have all the analysis about Ballarat covered.
I think Ballarat has a lot of potential given it is only a little over 100km’s from Melbourne with great infrastructure.
The areas you mentioned are on the money. Keep it low maintenance, period and central and you will be rewarded.
Just had a quick look at stock and something like this could work quite (yes a little more than you expected to pay, however it will rent easily and is really well located);
http://www.realestate.com.au/property-house-vic-ballarat-120207309
Keen to hear here how you go with your search. Remember to take action and good luck!
Just had a quick look at stock and something like this could work quite (yes a little more than you expected to pay, however it will rent easily and is really well located);
http://www.realestate.com.au/property-house-vic-ballarat-120207309
For that sort of yield you could be in a sturdy brick property in the suburbs of Melbourne.
I definitely do not disagree with the concept of investing in regional centres, but I expect the yield to be higher than the suburbs of Melbourne, especially where weatherboard residences are involved. Weatherboards cost money to maintain and I expect the rental return to foot the bill for this.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi Kris07, thank you for your advice. We actually inspected that property last week! It went to auction on Saturday and was passed in. The property has alot going for it, location most of all, but my partner and I weren’t sold on it. The most recent tenants were paying $355 a week rent which surprised me, seems high for the area, but it was good to know that there is that kind of market there. I think the vendors price expectations are a little high myself, so I’ll be interested to see what it sells for.
Hi Jacqui, thank you for your comment. I agree about maintaining weatherboards, it’s definitely on my radar. And yes, achieving better yields than we would in Melbourne is definitely part of the appeal of Ballarat. We won’t be considering anything under a 5% yield.
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