Goulburn has been popular for families seeking a home but are priced out of the Canberra market. However from an investment perspective you need to do your homework on the area.

The commutability to Canberra for employment is a little murky. Most folks do the carpooling thing because the train service is not viable. Only a couple of services per day and not at appropriate times for commuting to a job. There are some coach services, however as we all know, coach equals slow by comparison to rail. I am not a huge fan of bus services as the routes can be moved to a less convenient path, or indeed removed altogether, in the blink of an eye. I like rail services. Big metallic lines in particular locations on the ground. Expensive to “move them” so they tend to stay in place.

However in Goulburn, despite the fact those big metallic lines are on the ground, they are not particularly well utilized. This accessibility issue concerns me. It is a great shame that the rail infrastructure is sitting there and not being leveraged. As has been said already, the rail services have been spoken about many times and nothing has eventuated. I spoke at length with staff at the railway station to try to understand why on earth there were not some sensible services, or if any were on the horizon. The answer to this question was that there was no logical explanation as to why there weren’t some services for the commuting Canberra workforce, and that there was nothing on the table being discussed. The brochures about commuting options that were available were confusing. I could not help but enquire how a person could be standing in a train station that had direct lines to Canberra, and yet not be able to catch the train to work in Canberra. It defies logic.

In theory Goulburn is an hour’s drive from Canberra but of course in peak hour that figure goes up.

On the flip side, Goulburn is a very tidy town with a proud council. It has some substantial services there which are unlikely to go anywhere in a hurry. (eg hospital, tertiary education and a prison). It sees phases were the town is full of tradespeople there to work on nearby windfarms and such, with insufficient rental accommodation on offer. So you see these people literally take up residence in motel rooms. Quite literally you see them head off for the work day with their little lunch eskies just like you would from home. Great for the landlords in town while that work demand is there. And Bob the chef at the Astor Hotel makes great food and is very happy to oblige when tweaks to a dish are requested. A lovely town with friendly helpful people.

As Terry has mentioned, not immediately tax deductible. If you ever sell the property these costs are factored in when determining the capital gain and thus the capital gains tax payable. Stamp duty and legal fees are also in this category.

Wouldn’t touch it with a barge pole.

You have to watch out for how some of the insurers cover “contents” in unfurnished rental properties. Contents would be your carpets and window coverings basically. As an example, EBM has a standard $50k coverage on these, which is astronomical on say a 1br unit. Thus one example of where high insurance premiums come from.

I find AAMI to be fantastic for dwellings that they’ll insure. GIO’s rates are good on not-so-conventional properties, but they are very painful to deal with.

CGU is always great for a balance between pricing and quality of service.

You would need somewhere to move it to… together with council permits. As a first port of call, ring the council relating to the block you intend to move it to. Other obvious costs are for the house removal guys, and tradespeople at the other end to put it back together (especially plumbers).

Once upon a time, bank interest rates were closely tied to, and tracked the RBA cash rate. This has not been the case lately.

Irrespective of whether the RBA lowers the cash rate, it does not directly follow that the banks will do the same (particularly in the case of investment loans and fixed rate loans).

mddedf wrote:

So in the same area, if i spend less money to purchase a unit, and if the rental income for the house and unit is roughly the same, the ratio for unit is higher, that is what the bank want when it comes to assess the borrowing capacity for the second property. Do you think this is not true?

Yes and no. Yes they are interested in yield but they also know units have the burden of body corporate fees that erode your rent. If you look at the NET yield (rent that is left after paying the bills) you will be surprised how much the bills chew into the rent of a unit.

I Matt

You will also half your ability to service for other loans, since on a joint loan, you own half the property but all the responsibility to repay the loan (the bank will expect you to stump up the loan repayments in full if your partner doesn’t pay their half).

When you say you are looking for a partner who has experience buying and selling property, what do you mean? Do you mean you are nervous about the legal process and would feel better after one or two properties, or do you mean you are thinking you’ll do your selling without a sales agent and are looking for people with appropriate marketing skills, or other?

Hi mddedf

Nope it is most certainly NOT true. Never heard of such a thing.

Your borrowing capacity is influenced by your ability to repay debt. This is evaluated by income streams (your salary job, rental income from other properties, likely rent from the new property purchase, etc).

You might compare a unit and a house and the house has a better rental yield, and as such that one would be less of a drag on you moving forward than the unit.

Hi Newbie

RPData can be deceptive since a lot of agents do not disclose their sale/rent prices they have achieved. So the results are skewed.

Grab yourself a copy of the Australian Property Investor magazine and sift through the statistical pages.