Forum Replies Created
Chermside compares with Melbourne's Box Hill or Sydney's Chatswood (with the same growth potential being similar distance to CBD and an expanding retail centre)
Nundah/Toombul has proven performance since recommending this location in 2005 (based on prospect of improved travel times with the Airport Link)
Inner South has further growth potential based on proposed new rail and existing educational / scientific research/medical amenity)
Regards
Graeme
Hi GL, below are my responses in CAPS
1) When are you most likely to use a property sourcer? OUT OF FAMILIAR AREA, SPECIALIST PRODUCT TYPE SOUGHT (EG. NRAS), NO TIME/INCLINATION FOR RESEARCH
2) What attributes do you look for before committing to working with a sourcer? TRACK RECORD, EXPERIENCE , INTEGRITY, COMMUNICATION SKILL
3) When are you most likely to use a property sourcer? AS ABOVE
4) From previous experience what has been the best feature of the sourcing service? GUARANTEED RESULTS (IF NO SAVING ON AGREED PROPERTY – NO FEE)
5) In which areas do you find most sourcers incompetent? CASHFLOW ANALYSIS (THE NUMBERS MATTER), INSUFFICIENT DUE DILIGENCE, COMMUNICATION SKILLS
, – Graeme Freer,
Agree with Catalyst on questionable strategy of trading off capital growth for reliable yield in serviced apartments. Your resale potential is limited (selling only to other investors). Current recommendations for C+ve are Orange (based on expansion of Cadia Gold mine) and Bowen based on $9b upgrade of Abbott Point to 8 coal loading docks and a multi cargo port. Both regional centres have populations over 10,000 and diversified economies.
Bowen looks like it will finally have the long awaited boom with big influx of workers expected later in the year. Abbot Point $10b redevelopment going ahead (20mins north) and expanded rail link to Bowen and new rail link to Galilee basin coal mines being built by Gina Rinehart and Clive Palmer.
Surprisingly there are still many areas to invest where property prices are not nine times average wage and certainly not 9 x local wage. Still we are all likely more prudent after the US and UK experience.
Why not look at Steve's course? Free evening seminars coming up in Sydney eg PacificEastcoast 15.2.2012 and Residential Property Advisors 16.2.2012 but you need to be invited as they have Advisor and Client model (ie. they are selling properties in Sydney and interstate).
Von Krumm wrote:Thanks for your words clint, I believe you have summed up the crux of CF properties vs neg. geared very well.Kiwi Property Guy wrote:considering the growth potential of an investment is of course important.How important is this? If I'm not mistaken housing prices could drop say 10% for instance while rental returns remain the same or even rise…. hmmmm.
I asked in my previous post but seems it will get missed, "How much corelation exists between rental return and capital value"?
Von Krum
There is a clear correlation between commercial property return and capital value. ie. the yield determines the value. No tenant and the value drops. Just as with equities, there are growth stocks and other stocks which are purchased for yield or income.
Most properties fall into one category or the other. With reduced prospects for capital appreciation over the next few years, it makes sense to target high yielding property or to 'manufacture' growth through careful renovation projects.
The danger with the Aussie DIY culture is that everyone thinks they can add value through renovating themselves, and Fixer-upper properties are selling at inflated values. Personally I am also over renovating myself and recommend using professionals.
Tarli
I have already turned 55 and still acquiring – last one was off-plan projection is 10%pa and so cashflow positive . My biggest regret was selling CF+ve Potts Point, Epping (Vic) and Manly Vale properties post GFC to de-leverage against my better judgement (ex banker's conservativism and excessively prudent business partner)Likewise, happy to chat and help if i can. Experienced investro and mentor having transacted in every capital city (except Hobart) and Auckland in NZ.
Cashflow is good with Central Qld investment mining town, not so good on Capital Growth. PM me for details
Both Mackay and Gladstone will deliver solid rental returns due to the influx of construction and mining workers in these locations. There may be better potential for capital growth in neighbouring towns due to affordability issues (ie. too late to catch the steep growth curve). I have identified affordable opps in Bowen for eg. (20mins south of Abbott Point coal loader being redeveloped)
All the new Galilee Basin mines will freight coal through Abbot Point for export. Demand will likely be for newbuilt, low maintenance rental accommodation.Curtis Island recommended demand is going to escalate with influx of workers over next few years…
$72B was committed previously to Liquid Natural gas (LNG) plus Origin Energy’s $US14Bn reported in July, Three major oil and gas projects to each create 6,000 new jobs.
Source: Australian Financial Review – 29th July 2011.
It is still possible to find Cashflow positive properties (CF+). Regional areas mainly, which can mean greater risk especially if population is small and employment is concentrated in one or two industries.
You could consider a JV with another family member on a residential investment property. Bowen recommended due to affordable entry point and rail and (Abbot Point) port construction projects in pipeline to support Bowen and Galilee basin mining boom .
Some large estates being rolled out but then there is huge population growth expected as well so take up will be strong. There was also some NRAS in Mount Low/Burdell area selling last year. Anyone on the forum buying here might want to feed back
Recently had triple mirrored doors installed in one of my properties on Sydney's northern beaches for $1200. Custom designed shelving and hanging racks.
These are serious concerns. I have been investigating NRAS opps for clients and would appreciate knowing which ones to avoid. Having worked for 5yrs as NSW Regional Manager for a firm of property specialist accountants based in Melbourne that negotiate early access to good projects, I can say that it is particularly important to look at the track record of the builder when buying off-plan.
My feeling about NRAS product is that the deal should stack up on it's own …and the tax credits become the icing on the cake .Residex predicts 8% pa growth for Shepparton and Mildura over the next few years. Typically when Melbourne house prices peak, there is a move to Victorian regional cities, driven by affordability…until of course the increased demand also creates house price inflation in these places as well.
