Balmain. 100%.

Good point. You definitely need to know the state/territory residential tenancy act as well as the rights of both parties if there are disputes etc. There are some great Australian websites that cover frequently asked questions about tenants rights and the process of going through issues resolution — just google and you’ll find a lot of useful information. It’s also worthwhile speaking to other people you know who manage properties themselves and see what they have done.

If you go through a rigorous application process, and do referees and look at previous rental history, you should be okay. But one thing I have learnt — trust your gut instinct!!

Hi Shannon

I manage my two year old one bedroom apartment in Canberra. It’s sooo easy and I would recommend you do it rather than paying for a property manager. The only reasons why I would personally go with a PM is if:

– i had limited time;
– i bought interstate; or
– i rented a house with no strata/BC.

I have been very lucky to date (touch wood) and have had good tenants. Whenever I’ve advertised online, it’s taken about 2 weeks to find good tenants, and they have always paid on time each fortnight into my bank account. All i’ve had to do is:

– take bond and lodge it with ACT rental bonds;
– buy a lease agreement from the newsagency and fill in the blanks;
– photocopy keys and complete condition report (get a copy back from tenant);
– complete inspections every 6 months.

I like managing it myself because i can see how the property is going, but also be more involved in the selection process (i.e. i always do referee checks and get heaps of details of the prospective tenants). The only issue I have had is when there was an error with one of the major banks and the tenants money didn’t go in my account for 4-5 days. I called them and they did everything they could, so i wouldn’t really call it an issue.

The best part about doing it yourself is you only need to look after the inside of your apartment (and even some stratas have kitchens etc covered under body corporate)… everything else is looked after for you.

I’m thinking of buying a property interstate — if i do this, I will definitely go with a PM because it would be harder for me to do it by myself. But if you live local and are up for a challenge (or some fun, depending on how you see it), then manage it yourself and save 5-9%!!

Cheers
Matt

I was recently in gosford over the new year break and I must say it is disgusting! I would never ever want to live there again ( I lived in Gertrude st then hills st in those apartments at base of hill).. That was in 2004 and 2007 respectively. Back in 2007 it was going downhill, now it’s a ghost town and looks like its falling apart. If you buy, make sure it’s near water and away from CBD area. They need to invest a lot to make it vibrant and trendy

Hey Josh

I recently bought an investment property (a 1 bedroom apartment) about 6km from Canberra CBD.

In terms of what is better as an IP, it depends on the market in the area you're looking at.  I did a lot of research on my suburb before purchasing the apartment rather than a townhouse.  A few reasons:

– there is strong demand for apartment living from students and professionals who want to be close to work (given the proximity to 3 schools/universities) and government departments
– close to a large shopping centre
– close to a large lake and bike paths
– close to public transport

So I determined that I would get a better rental yield and also be able to find a wider pool of tenants for an apartment than a townhouse given that the market in that area were mostly students or young professionals wanting an inner-city lifestyle close to puiblic transport, places of school.work and the shopping centre.

The townhouses were generally older (not as good depreciation) and more expensive.  With townhouses, there is more that is likely to go wrong as you have a garden, hot water system etc…. where as an apartment has most things covered like the aforementioned under the body corporate, so really if anything goes wrong then it's up to the BC to fix.  However with that said, you have a quartely levy that you'll have to pay, however this is tax deductible.  I personally think an apartment is more easy as an IP because of the BC.

Also, from what i have seen many professionals in Brisbane are looking at apartment living (similar to Canberra).  As it turns out, my place was on allhomes (like realestate.com.au) for 2 days before I found someone and i'm currently getting a rental yield of 5.9% with capital growth as well.

You're right about land appreciating more, however it depends what you want – strong yield or strong capital growth.  You might be able to get both, however if you eventually want income from it, then look for yield.  It really depends what you want out of it and whether you want to make money from rent now or money from paital growth if you decide to sell or borrow from it for future properties.

Just my 2c.

Chrs

Matt