I don’t know in some areas of the big cities it would be fair to say that early investors find undervalued areas and begin to buy. Others see whats happening and want to get in on the action and soon the prices go crazy.

However, the rural and regional price boom I would say could be almost solely driven by investors as many people would not buy PPOR in these areas in large numbers, because they are cheap and all the “bargins” have gone from the major cities.

Let’s face it who would have thought of buying in NZ or Tasmania just two years ago?

Another factor is the media. Current affair run these stories usually along the lines of in Tasmania you can get a mansion for just $100,000 located on a sparkling stream etc. Suddenly everyone thinks cheap property in Tassy and the prices go through the roof.

Another example was the Brisbane suburb of Inala. High crime, high unemployment mainly housing commission suburb. However, located just 12km from the CBD and right next to the largest new suburb built in Qld Forest Lake(large lake relaxed life style new homes etc).

Current affair did a story on the housing commission doing up the houses and selling them off. These houses just one year ago were selling for $65,000. Now they sell for $170,000. Many of those that bought in this area were from Sydney and Melbourne. Even now many Brisbanites are very wary about buying there.

So I think everyone can take the blame, PPOR’s investors and the media. I think everyone is jumping on the bandwagon. I also notice the media seem to be the main advocates of the property bust scenario. So it will be interesting to see if the “bust” occurs much sooner now the media are on the trail.

One of the ways I found to see if there is an oversupply of rentals in your local area is to go to Realestate.com.au and look up the rentals in your area. If there are more than say 25 properties for a town of 50,000 or less then I would say there is an oversupply and then I look in other areas.

Hope this helps.

Happy Birthday Chandara. I hope you had a great day.

Rest energise and go out there and make a fortune!

davo

Hi everyone my name is David I am 33 yrs old and work as a Finance Manager for RE/MAX. I have been involved in the finance industry for many years but never really found out how it could work for me.

In 1994 my partner and I bought an IP in Coorparoo in Brissy. Got it cheap spent $7,000 fixing it up. Held it had some tenant problems I got cold feet and we decided to sell in 2000. HUGE mistake. We sold for $163,000 the same house sold last month for $300,000. I have been kicking myself ever since. So last year started buying investment properties mainly becuase my sister needed somewhere stable to live.

I now had far more knowledge about the property market and it was Rich Dad Poor Dad that started it for me. We now have 1 PPOR we owe very little on and four +CF ppties. We are now tossing up between buying a commerical ppty or a block of flats.

We have an amazing cat no kids. So if the Brisbane people get together we would love to be involved.

Davo70

Yes you must live in the property within six to twelve months of purchase and you will have a period in which you must stay in the property. I would check with your local office of state revenue.

Be careful if the government thinks you are avoiding tax they can come down on you hard.

Davo70

Leigh I am fairly new to any sort of investment forums and I agree that if people are posting negative statements just to upset or incite people then yes that upsets me. However, most of what i have read on this forum is predominantly positive just poorly worded in some cases.

I was very enthusiastic when I bought my first investment property but have realsied that I may need to make some changes in my strategy to avoid making costly mistakes.

Oh and to everyone I believe that a book by an author whose name escapes me (female Australian investor) may be a little to blame for the not looking at properties before purchasing mentality. She actually advocates this in her book saying she has done it for many of her properties.

When I look at the net for properties in my price range I notice that many are in areas I have never even heard of. So I look them up and do some research on the towns and suburbs and still would like to see them before buying. Lord knows what mess they really may be in and what nasty repairs costs lie waiting.

So do your homework don’t rush to buy that property there are always more coming onto the market if you miss that one.

davo70

Hi Smartmoney, I suppose it will depend on how much of a deposit you have saved. I assume from the info you have provided that you are a First Home buyer. If so then I assume that you are aware that you would not be eligible for the FHOG unless you intend to live in the property.

So your deposit must cover the banks required savings (usually 5%, although there are ways around this) plus the costs of purchase, such as stamp duty, bank fees, mortgage insurance and solicitors fees etc.

Also will depend on what state you are buying your proeprty as these costs vary from state to state. Qld tends to be the most expensive.

Hope this helps

Davidsm70

I have several positive cash flow properties in Brisbane suburb of Inala and Wacol. Another one you may consider is Darra. But once you get above $130,000 purchase price in these areas the yield drops.

I also have a few in Ipswich at Redbank Plains and Goodna. The area is not as nice as the Brisbane suburbs but the rental is as high and purchase prices are still lower.

All of my properties have also experience good capital gains as well (this was not my goal when I bought them just a bonus).

Hope this helps

David