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Hey there Kristine
I hav been targetting Country towns this whole year, and loving every bit of it…
firstly, if the pop is under 2000 ppl u need to ask yourself why that is? then there is the problem of getting finance, the main banks hav a threshold of 10000 i think, some abit lower at 7000.
To research in these areas you can do allot on the net, go to realestate.com and pop in the places, if the towns or areas are not listed do a net search for realestate agents in the suburb.
I looked at a place in manilla for example, on the above mentioned address, was making 210 pw and was only $110K (was 3 units in the one place)… but, manilla is on the other side of tamworth, the side where there isnt much else, exept more smallish country towns. if it were on the Singelton side of Tamworth it would hav been worth twice as much… the tennents were oldish, and hav lived there forever… the place was a mess and required alot of work, naturally an agent will not dwell on this point while on the phone! Manilla’s pop is also slowly decreasing… not a good sign.
Buying in towns between regional centres is a good way to start eg dubbo, wit a pop of 30K has 3-4 growing towns on the sydney side, ie Lithgow, bathurst, and orange (perhaps even Wellington – where a new prison has just been approved through council and will be finished in 2 years). but wen u pass dubbo u hit Narromine, where house prices are just over half that of dubbo.
Walk into an agent pretending to be a person looking for a rental to move into. if you get offered pages of vacant properties u will know that getting a tennent yourself will be hard.
If you hav found a place to buy, stay in the area for the night, speak to the locals, buy the local newspaper and read it front to back… your street may be at the height of a crime wave!
Observe the shops, are they open late? how many are closed or worse still boarded up? a place with many closed pubs means that at one stage there was a population sufficient to have them all open at one stage…Is there a uni close buy? is there the population to warrant one in a few years time?
what developments are being put through council? what large companies or factories are building there? is it a main route for truckers?
BUT u do need to get into your car and drive to the places personally thats for sure, take some music and a camera… i have done about 25000 km this year, but it was the best…
Hope this helps!
Jason
An answer to some of your questions…
Buying land and building is a great idea, but to make good money you need to be able to dedicate yourself to the job, meaning that the more work you put into other peoples hande the less money you make. knowing ppl in the trades is also a bonus! (be prepared to take time off work, and do an owner builders course at tafe)
At the moment im also thinking of doing the same, im looking for a block to develop in a timeframe of 2-5 years. My advice… FORGET about Sydney! its a joke what people want for land down here. and especially when some councils are asking for 40 and $50K community contributions per residence its a wonder ppl are making any money unless they bought the land 30 years ago…
look outside of sydney, country NSW is still an untapped Gold mine in my opinion, Dubbo, Bathurst, Cowra, Forbes, Parkes.
In the last 6 months i hav purchased 3 properties in the above mentioned areas, all paying for them selves (and missed out on many more) so they are out there to find, but are getting snapped up VERY fast by ppl who do this full time 7 days a week.
Walking down the main street of Bathurst will show you many properties under $55K that hav been sold in the last 2 months… just an example.
As for doing it with friends? all i can say is you better be good friends… tread carefully when money is involved…
Interest only is a great idea, not only to leave more money in your bank account, but you can still inject lump sum payments every now and again into the loan… when the 5 or 10 years is up, re finance the property, chances are the place has at least doubled in value and u now hav a ton of new equity at your disposal…
hope it helps
CGT… what a joy lol
I looked this up once, its in the free booklets available from the ATO. To not pay CGT on a property, it must be your primary residence. But for how long? some say 6 months, some say 8. A link from ninemsn last week mentioned 4 months. what you do is buy an investment vacant, and “move in” either oficially or just on paper, meaning that you transfer drivers liscence info and a few other things into the new address. after 4-8 months you then move out and rent the place out. BUT this buys you 6 years of not paying CGT.
But i may be wrong… havnt looked it up in ages lolhope it helps… oh and you hav to move into the place on or before settlement, even if its rented out for a week after settlement the rule no longer applies!
