Hi All
I have noticed a few people mention town population as one of their criteria that helps them decide on if they will invest in a town or not. Just thougth I would see what everyone thinks.
I have found some great properties in towns with populations of 7,000-9,000. However some people warn that you should only purchase in towns with more then 10,000 some say more then 15,000.
I know at the end of the day it is my choice where I buy, but would love to hear your thoughts.
Delboy[cap]
Look at the major employers of the area, is the local coucil efficient and respected. Ask the agents about property turnover and vacancy rates. If the locals are staying and the vacancy rates are low just make sure the potetial IP is not infested with termites and all should be ok
aluminati.As a general rule that when investing in small towns tennants and resales are slow so make sure that this is a long term strategy and be fussy with your purchase.
Also ask about how many people in the town are renting at the present time, if no one is renting then no point buying there to rent if no one is going to rent it, as steeve said in his books that is why he chose the town (carn’t remember the name) where he bought his first IP!
The weak will feed off of the strong until they are strong enough to be fed off of…
Hi Delboy,
For me the cut off point is 500 000, but then I am a growth focussed investor who likes the increased certainty of large cities.
Derek
[email protected]Read my comments? Think I can help you? PM or email me.
I tend not to agree – don’t let just one thing be the benchmark of your property investing. There are some great deals in areas with only 600 population and there are towns with 20,000 population but have many gangs and crime rate is very high and vice-versa. Look at the town size as this is important – then look at surrounding factors i.e. tenants, shops, schools, crime-rate, proposals etc.
“If You never never ask, you’ll never never know”
Try running an ad in the local newspaper first advertising the type of property you are looking at buying and see what kind of response you get.For approx $40.00 this is a very cheap insurance policy.Also you could check out the possibilities of wrapping in the same area as this would give you another option if you find it hard to find a tennant. Regards Beanie
Live every day like its your last
Like another wise person on this website once said
“If you are going to invest in a one horse town, you had better be very sure the horse doesn’t leave”
That pretty much sums up my thoughts too. I agree with Derek and prefer larger towns/cities.
Thought I’d repost a reply I put elsewhere- seems this topic has come up under 3 separate headings in a few days.
Derek and HousesOnly- I know what you mean about going for growth, but as I’ve stated, buying in a small place- if it’s the right kind of town- can have huge growth prospects.
I said elsewhere:
Depends on wehich properties one is buying into (re the original question). think Lorne, Vic; think Berry, NSW; or Bowral, NSW. They all have a population of a few hundred, but you would have NO problem getting a loan for them (might find it hard to get entry in those places though- they’re exxy).
I just bought into a place with a few hundred people… BUT… it’s oceanfront, with national park behind it, and has one of the greatest natural structures Australia has. It’s a tourist destination basically, but with a solid population (albeit small) throughout the year. There are NO vacant rental houses there currently. And I don’t have to rely on abbatoirs/factory/mining industries to sustain it.
If you are buying into an area with a small population, there are different ones- some are isolated country towns; some are untouched treasures. The place I am buying into had 700,000 visitors to it last year.
So all small towns are different. Of course, EVERY place one buys into- whether it be an innercity area, a country town, or a coastal village- requires research.
kay henry
How,s this for size.I looked at a 4brm house yesterday in a one horse town miles from anywhere.
Population dont know but there was a tavern and about 6 houses.This house has been on the market for a while.More than a few years actually.
When I heard about it I did some research and came up with some very interesting data.
House is leased to government for school teacher.
My first thought was they must be closing the school but after a few calls I,m told schools staying as it services such a large area.
I am then told that there are no other houses for the gov. to lease and there are no plans to bring in any more houses.This is all from the horses mouth.
What do you think about statistics now.
A little gem sitting there waiting for someone to look outside the square.
And guess what.Its just been repainted.
Price $35000 Rented at $160p/w
What do you think I did?
Russ.[biggrin]One other point to remember as well guys, I cant say there has ever been a time when buying your own home was so far out of reach in Sydney metro, I just came back from mid NSW and could not remember a time when I have seen so many new house’s going up.
Yeah maybe a lot of the towns are around 7000 to 30000 plus pops but the march is on. There are many people swapping there 500k loans for full cash down purchases and getting the mortgage monkey off their backs, hell, we are doing the same. Nice little business, no loan, new house and plenty of cf+ joints surrounding you to divy dally in.
I feel its hard to make predictions given the current climate and you cant say there has ever been a time in history that has stayed the same, every new day is a different day. I can already see the effect that Guys like Steve and fellow investors have had on the regional area’s.
For eg, best place to find out about the market in small towns has got to be the pub! Young bloke tells me about his older brother, he buys a 3 bedda in a 10000 pop town for 28k one and a half years ago, just sold 2 weeks ago for 98k!!!
We are our own worst enemy! Theres a huge influx of city folk jumpin on anything thats even close to equal! Well perhaps maybe different in other states i dont know but regional NSW is up there.
I found heaps of cf+ joints in 500 to 2000 pop towns but hard to get PM’s and then there is the drought that’s knocked it hard, theres also around a -7% population growth on average and a lot worse in other area’s.
Anyway, the point I am trying to make is that these 7000 to 30000 pop towns will start seeing good pop growth over the next ten years. Look at the children of home owners around Bondi, manly, harboard to name a few, where did they buy? Western suburbs, why? because they could not afford to live next door to mum and dad, the same go’s now, except with cheap airfares and the likes makes these regional towns not as far away as they used to be.
A few more media stories promoting the sense of making the move and a reality tv show and its all over!
Anyway, that’s life have a good one gang[strum][strum]
“Dont be looking in your back yard for a four leaf clover when the opportunity of a lifetime could be knocking on your front door….” “Even though you may be on the right track, you can still get run over if you sit there long enough”
You also have the likes of Coles and Woolies investing some big bucks with their upgrades and so-on, that is another good indicator of growth potential for country area’s.
“Dont be looking in your back yard for a four leaf clover when the opportunity of a lifetime could be knocking on your front door….” “Even though you may be on the right track, you can still get run over if you sit there long enough”
delboy.
Normally I post advice based on legilation ATO rulings and cases. So I want to make it clear that the following is only my opinion so should not be taken with the same credability of my other posts.
My basic rule of thumb is it takes a population of 250,000 to be self sustaining. Any smaller and you are at the mercy of the main industries in the area. At a population of 250,000 there are enough people to stimulate the economy regardless of the fortunes of the local ecconomy. Though it helps if that local ecconomy attracts self supporting residences such as retirees.Don’t forget the most important question…will someone finance it for you?
You can cut down the list of small places to research dramatically by excluding all the towns where you cannot easily get finance…though it’s always possible to work through a local bank branch – if there is one.
Cheers,
Aceyducey
Delboy,
I live in a suburb which has less than 5000, when I moved here 8 years ago it had even less. It is now a “hot spot” and is booming. There are heaps of affordable homes, new estates, shops, transport, all sorts of facilities. People are buying here, moving in and renting. I daresay, it won’t stay at 5000 for long !!!
Jo
Originally posted by Monopoly:Delboy,
I live in a suburb which has less than 5000, when I moved here 8 years ago it had even less. It is now a “hot spot” and is booming. There are heaps of affordable homes, new estates, shops, transport, all sorts of facilities. People are buying here, moving in and renting. I daresay, it won’t stay at 5000 for long !!!
Jo
I agree, the baby boomers are cashing up their city homes and kickin back in the country area’s.
I went to a kit home retailer today and found that there are heaps of people building in these small towns. With the help of the net and cheap air it has to be said that these out of the way towns are looking more attractive for the people seeking lifestyle rather than having big mortgages in the cities with a J.O.B (just over broke) mentality.
Tell us more about this town Monopoly i think it would give us a good example of what life is really like in a small town community instead of just speculation.[biggrin]
“Dont be looking in your back yard for a four leaf clover when the opportunity of a lifetime could be knocking on your front door….” “Even though you may be on the right track, you can still get run over if you sit there long enough”
Mysta,
I don’t know where you are from, but if it is in Victoria, then you should be familiar with SOUTH MORANG (just next door to Mill Park, near Bundoora). It is NOT a small country town; oh well maybe 15 years ago, but I can assure you it is anything but small. It may not have a HUGE population at present, but its growth is one of the fastest growing new estate areas in Metro Melbourne. It is one of the only places left (Northern) that still has available land for sale.
There are homes here that range from 250,000 to well into the million dollar mark. My home is on the higher end of the scale, and it can hardly be called a small town residence…LOL Seriously, though, why do people think that if the population is less than 20,000 the town is full of tabacco chewing cowboys????
So I guess I can’t anwer your question adequately Mysta.
Sorry if I have disappointed y’all [lmao]
Hi All
Just want to say a big thank you. Some great advice and ideas. This is why I love this site. Hope I can be of help to you all some day. When I get a few properties under my belt that is. Cheers
Delboy
Originally posted by Monopoly:Mysta,
I don’t know where you are from, but if it is in Victoria, then you should be familiar with SOUTH MORANG (just next door to Mill Park, near Bundoora). It is NOT a small country town; oh well maybe 15 years ago, but I can assure you it is anything but small. It may not have a HUGE population at present, but its growth is one of the fastest growing new estate areas in Metro Melbourne. It is one of the only places left (Northern) that still has available land for sale.
There are homes here that range from 250,000 to well into the million dollar mark. My home is on the higher end of the scale, and it can hardly be called a small town residence…LOL Seriously, though, why do people think that if the population is less than 20,000 the town is full of tabacco chewing cowboys????
So I guess I can’t anwer your question adequately Mysta.
Sorry if I have disappointed y’all [lmao]
But you told us this Jo; “I live in a suburb which has less than 5000, when I moved here 8 years ago it had even less. It is now a “hot spot” and is booming. There are heaps of affordable homes, new estates, shops, transport, all sorts of facilities. People are buying here, moving in and renting. I daresay, it won’t stay at 5000 for long !!!”
I also dont assume that there are lots of tobacco chewing cowboys their either! I have worked for weeks in towns of less than 150 and still could not find any tobacco chewers[cigar][blink]
Anyway I just thought perhaps you could have shared the towns growth/prices etc[grad]
Regards,
Mysta“Dont be looking in your back yard for a four leaf clover when the opportunity of a lifetime could be knocking on your front door….” “Even though you may be on the right track, you can still get run over if you sit there long enough”
Hi Mysta,
Please excuse my “cheeky” tabacco-chewing cowboy comment; I was trying to get a reaction; [guilty][tongue]in a nice way!! LOL
Anyway, to answer your question, property prices here vary a great deal because they are mostly new homes. However, of the older, established homes, 10 years ago they could have been purchased for approx. 150,000 now the same (basic) home has doubled to 300,000.
I paid 75,000 for my block of land and built a huge house on it. The same sized block (which is unavail anyway in this estate as it is full) would cost (in today’s market) 200,000+ and when you then add the cost of a basic home to build here; it can be quite costly; but certainly not impossible.
Hope that helps Mysta….again sorry if I was offensive in anyway; no malice was intended I can assure you.[guilty]
Jo
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