Sure…sorry needed to vent! Don't mean to hijack the post but my answers are not short to give you a bigger picture. I am stuffing up my due diligence somewhere I just need to work out where!

IP 1: Freshwater NSW (2 bedroom unit)

We have made $90k in equity since it was purchased in 2007 which is not anything to write home about and because it's a JV with my brother using the equity is more tricky than it is worth – I have talked to Richard about it last year. Tenants are not a problem here but the yield is only 5.2% off the original PP and 4.5% if you go off current value. GROWTH AND TENANTS BUT

UNUSABLE EQUITY

IP 2: Toowoomba QLD (3 bed, 1 bath brick house on a slab) 2011

Good tenant who pays $310/wk and we paid $285k but it really has only gone up by $15k…not good for almost two years. Could use a reno in a few years but there is no point now as it would be overcapitalizing. Just had an insurance claim as a number of tiles on the roof move and after a storm the kitchen roof and walls all flooded. NO GROWTH BUT TENANTS WITH BLAH YIELDS.

IP 3: Affectionately named 'My little lemon'. North Mackay, bordering on Mt Pleasant (4 br, 1 bth brick house on slab) June 2012

Sat empty for four weeks when when first bought and vacancy rates were around 0.6%. PM's mother got brain cancer but agency didn't tell us she had left and didn't pass on our property to another PM. We changed agencies and it rented out quickly.

Had an undetectable leak under the slab (I posted previously about this). We ended up re-routing the plumbing at a cost of $5,800. Then the plumber flooded the place by accident…which was fine, accidents happen and that was meant to be where this property turned around. Right?

Instead the a*s fell out of the coal industry and vacancy rates skyrocketed. I called my PM to make sure she had locked in the new 12 month lease we had agreed to a month prior. Apparently it was all good and being sent back just as she went to Bali for a week and a half…thank goodness.

In reality the tenants stopped by just after she got back to drop the keys off. The bond will cover the two weeks notice they didn't give…can't believe I didn't know it was only two weeks in QLD. Now it has been on the market for four weeks and we have drop from $590 to $560 per week with no takers. Paid $422k so at that rate it would still be ok return but I am not so sure about the market there now. NO TENANTS, NO FORESEEABLE GROWTH

At any rate, I see the above as littered with mistakes I have made myself, which I will have to learn from and avoid at all costs in the future. Beware of mining, don't buy houses on concrete slabs, stay on your PMs case every single day until a result is locked in, don't enter JVs where you can't manufacture a profit then sell, carry out better due diligence (the topic of this post) to ensure I don't buy in areas that stagnate, buy where I can manufacture growth always, and the list goes on…learning the hard way, but learning.

Going to re-read now. Both of you contribute such valuable info and opinions on here and it makes even more sense now

In my experience on both ends of the stick I have found  that your standard real estate agency will expect 2-3% and property marketers anywhere from 3% but usually 4-6%. 

I just got two from Australian Tax Depreciation Services – $450 each including GST with site inspection.

Yet to check the figures as I only got them back last week.

They took a while though…just over two months! But could have been the time of year?

Hi Dubstep,

Three of us went up there and were laughing so much as it is all so close. By the end of the weekend we were feeling more like locals and I must say going from one inspection to the next on the schedule was made more annoying by the traffic on the bridges. Hate to think what it was like prior to the new bridge being built!

I guess that is why it is important to talk to lots of people in an area you visit, to really understand the mindset. It isn't Sydney so not surprisingly they don't get annoyed by the same things as we do. 

A few agents pointed out that if there was a downturn in the future that affected the low vacancy rates that it would be the outer lying suburbs that they would have more trouble renting out. Having said that Mackay has a very low vacancy rate and they also said at this point in time just about anything would rent out in a flash.

We bought a few months ago in North Mackay (the part just near Mount Pleasant). Having some troubles at the moment with the plumbing but aside from that bought a 30 yr old 4 bed brick house and renting for $590 per week to four young people working in different industries up there. Could use a reno in five years or so but because the rental market at the moment is strong it doesn't warrant it currently. Plus we have to get over the plumbing bill

When we talked to various agents up there a lot said that many people in Mackay have the mentality that going over the bridges (from town to the northern suburbs) is too far. We found this hilarious coming from Sydney as it all seemed so close, even the North Beaches area which is a little further away. I guess the important thing is to think more like a local. We did buy over the bridge but just near Mount Pleasant so really not too far and this is a more prestigious neck of the woods from what we saw.

Agents (in particular property managing agents who do the letting) said that Ooralea, West Mackay, Mount Pleasant, Rural View and North Mackay were all popular with renters. A number of them also mentioned how important a big double shed and side access is…for the boat. It's true from what we saw up there, seems to be a prized feature. Some agents mentioned that the newer estates can be less appealing as they don't allow space for this.

I did a short stint for a company that sold properties up there and it is interesting to see the difference in the marketing perception as opposed to real perspective of good and bad suburbs you get when you visit an area. Definitely make a trip up there before buying and talk to as many locals as possible.