Hi,
Would value opinions on following question.
We are looking at purchasing an IP in a large country town in Victoria. Property prices have gone up quite a bit in the last couple of years – 20-30%. Overall quite happy with due diligence of area etc, but as this will be our first purchase, a bit nervous that we might be buying at the peak, and that prices may stagnate or worse – drop. Would you still buy in areas such as this?
Purchase price: around $150,000 rental income $180 pw. low vacancy rates. will only be out of pocket small amount.
would REALLY value your input.
Thanks Dot[
]Am I asking dumb questions????
Regards Dot.
Hi dorothy
i beleive that you really need to look at the individual area, is the city growing pop., what economic developments are happening etc. ie if it where ballarat for instance i would be happy investing at the right price because i feel that developments such as “fast train ” can only help this city.
It all comes back to supply and demand. on the figure you have stated 150k for 180pw rent you want to make sure you are going to make a capital gain because you will lose money on this deal. Personally i would only buy cash positive. it might help us if you tell us what city so people familiar with this city can make comments
regards
westanHi Westan,
Place comparable to Ballarat.
we are also considering another propery, which we have offered $134000 for. will get same amount of rent, But we feel that the other property will have better capital growth,because of the area, and its in much better condition, so thought we might pay the extra. What do you think?
Dot[
]Dorothy,
My opinion is that you would only look at Ballarat or othe rural towns if you where after positive gearing and at the figures you mentioned they would be negative. Capital growth in rural areas is more of a bonus than a sure bet and I would think ( looking into my crystal ball ) that Ballarat would be more likely at its peak than not. But who knows. My opinion is that if you are going to negative gear at least do it in high capital growth areas such as CBD 10-15 K radius or near water etc.Victoria is pretty tough at the moment! Anyway that my 2 cents.
MJK
Thanks MJk
we will consider your opinion also.
regards Dot
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