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I’ve just been informed that this technique of “Offers above $x” is in use in Queensland for rental properties and is to be banned by the Government. It can’t be long before its use in selling goes the same way.
In Melbourne, a rule of thumb return, net, is considered reliably to be 80% of your gross rental. The lost 20% covers outgoings and is about right over time in my experience.
Don’t forget Landlord Insurance, it’s your defence against “tenants from hell” and is worth every cent.
Three kinds of residential that banks hate: Motel style units, studios or bedsitters and company share apartments. Many lenders also have a “minimum floor area” filter before they’ll consider lending.
One way out, for exceptional deals only, is if you have other investments, gear them up to buy a motel unit or similar, for cash.
I hesitate to buy special purpose-built residential. You want to be able to market to the widest tenent base or buyer group. Vry small units are a niche form of supply.
When I first bought in ’73 the interest rate was about 7.5%. Within a couple of years it was over 12%. Prices did not go down at all. People don’t give up their home that easily, banks were extending loan periods instead of upping repayments and, because higher interest is usually accompanied by inflation, equity was increasing.
Demand is higher now for some fundamental reasons such as the easier getting of loans since banking de-regulation, improved information sources, (you can see and buy on-line anywhere now,) and it has dawned on many an Australian that real estate is safer than Telstra shares.
This phenomenon of higher prices is throughout the developed world, not just in OZ. Look for reasons of greater depth than just a local economic cycle. BUT, beware the retiring baby boomer.
Hastings has to be the goer in Melbourne. The Citilink puts Melbourne Airport only 60 minutes by car and population is increasing very quickly. Much municipal expenditure as well as commercial.
I too, am looking for similar. I have found that web-site listings are poor because many of the properties are not taken off when sold. My best source has been the local town newspaper if there is one. The supplements are timely and have better pics.
The best way of all is to nail down your area and go and see agents personally AND MAKE THEM UNDERSTAND that you can sign up right now if they have what you want. If you are specific they will remeber you and call you if something comes up.
Others are looking too, so leave some sort of impression with them so they will remember you – you know, use “that voice”, trip over in their office, something completely normal but memorable. many will never call but you only need “that one”. good luck.
