Geraldton WA

I think there is a few good buys left around there, but talk to the locals. I have a friend in Gero and he thinks that some of the areas (the ones with cf+ properties are, well, a bit ‘rough’ and have similar tenants. Research never hurt anyone.

Also, (and correct me if Im wrong) but I think the banks have a lower LVR here (60 – 70%)

Luke [cap]

Hi Recoveryman

a friend of my brothers is staying with my brother at the moment comes from Geraldton if you want any local knowledge give me a call

regards westan

Me here over in Geraldton… But I like keeping secrets…

All is correct about lower rents, but then again, the demand is quite high for ‘good’ rentals. What I mean by that is in areas that are a bit better.

They are still flushing out a few suburbs of the homeswest housing…
Steph.[biggrin]

Success is 1% inspiration and 99% perspiration.

I have recently purchased 9 properties in geraldton ranging from 63,000 to 82,000. They are all tenanted except for 1 that settles in 3 weeks. They are all nuetrally geared which I am happy with and prices are rising. I have invested in rangeway, spalding, karloo and beachlands. The not so great areas are changing as the department of housing sells off many of their homes. In some streets there will be no more than 1 in 12 homes as housing commission. Where else in australia can you find coastal property in brick for less than 100k that pays for itself?

Hi Russ,
You sound like a local do you live in or near geraldton? I have done my homework on Geraldton and am well aware of the reputation surrounding some of these suburbs. This is why I took the time to contact every real estate agency in town and most importantly the ministry of housing. The message I got from them was that they will be selling off many homes over the next 3 to 4 years in places like rangeway , utakurra , karloo. Have spoken to numerous property managers, and read everything about Geraldton I could get my hands on.

One of the real estate agents summed it up for me. He mentioned a street in Rangeway called Kenny crescent. He said 12 months ago it was worse than Beirut , a real war zone. In the last 12 months the ministry has sold off the homes there and that is now considered a good street. 12 months ago you could have bought a brick and tile home for $55 to $65k there. Now they are selling for just under the 100k.

I saw this as an OPPORTUNITY and in 1 instance bought a home in what was then considered a BAD STREET with the knowedge that within 12 months only 1 in 12 homes will be occupied by dept of housing in that street. I organised a 6 month settlement. Signed contracts in jan for $63,000 (3 br brick and tile home , around 20 years old fully renovated) well below replacement value. Have not yet settled on this home (due to settle at the end of the month) In the meantime the “problem” neighbours have been vacated and those homes sold off, some to owner occupiers. Log onto realestate.com and see how many 3br brick and tile homes you can find in geraldton for $63k , you will be struggling to find anything under $90k

My decision to buy in these towns was based on the following.

1)Brick and tile homes available well below replacement cost
2)Coastal town
3)Prices over the last 10 years have been flat so Geraldton in my opinion is due for its turn of the property cycle price rise. I see less risk and more opportunity in the short term in buying into suburbs that have not seen phenomenal price increases in the last few years. – This is where I believe the greatest risk is.(short term)
4) the money being invested in Geraldton, beautifying of foreshore, ,tafe, hospital, transport link etc
5)selling off of ministry homes
6)geraldton featured in my business magazine (1 of the top 25 boom towns may 2004)
7)nuetral cashflow (on my purchase prices)with room for capital growth. There is “insurance protection” for me in that the purchase price in relation to the rental return has a healthy balance. This to me protects the value from falling.
8)I am kicking myself for not buying in Tasmania 12 months ago when you could buy brick and tile homes in the not so great areas for around 70k , they are now well over the 100k

At the end of the day everybody has different investment goals and opinions of what is an opportunity and what is not. Successful investing is all about realising that something is an opportunity and acting on it.

A few years ago I purchased a few properties in Redcliffe QLD (late 2000) for around the 100k. I had people at work tell me Redcliffe is a dump I used to live there…blah blah blah (These people don´t own any property mind you) Also when I was booking my ticket to fly to redcliffe the lady selling me the airfare had something negative to say about investing in QLD (she was from QLD, and that redcliffe was a dump – it used to have quite a reputation) i have just sold one of these homes purchased for $108,500 for $283,500. I have kept the other 2 I own there.
Anyway I was just starting out then and it made business sense to me to buy there (the figures stacked up, it was a coastal town, predicted to boom in many articles I read) so I went with it.

Thanks to that decision I now have 17 properties. I can only encourage everyone to do their own research and make there own decisions and not listen to your brother-in law, friend etc that owns nothing. Read everything you can, talk to as many successful people as you can and educate yourself.

In response to your query about checcking out the propeties yes my best friend had a look at them for me as she went to inspect some of her own and the feedback was all good. I know have the confidence to invest without physically having to drive by each property I buy although it is comforting that she inspected them for me.

Russ , would love to hear more information about the indigenous comment you made in your post.

regards,
K.

Like Mortgage Advisor said these areas get sold on to low income families and never really improve.
I live 65 km,s south of Geraldton and go there every fortnight to do my shopping.
I have looked at buying investments there but could not find anything that I would be happy with.
There are better areas if you have a few more dollars to spend.
As for being a coastal town I would personally have to say it is one of the worst I have come across.
There is a reason why people drive through it to get to Kalbarri.
Because it doesnt offer anything.
A walk through town and a glance at all the empty shops and business premises will tell its own story.
A drive through the industrial areas will show the same thing.Most properties in the industrial area have dropped in value and a lot stand empty.
If you want to invest in a coastal location then go south of Perth to Mandurah or Bunbury.
Prices are still rising in these areas and will continue to do so.
Russ.

recoveryman,

I am still buying there also. I have 2 more places under contract (again with a delayed settlement)

What has been your experience with the Tasmanian property? I am kicking myself for not buying there.

k.

Russ,

Appreciate you live locally and see things from a different perspeective.

Can I ask where you are investing at the moment?

Geez Russ… You make it sound like GEro is a total and utter dump!!! What a crock of Sh*T!!!! I’ll take Geraldton over Perth any day mate… Coming from someone who has lived in the city her whole life…

Yes there are some issues, but if you bothered to look on the local council website you will see that there are some really good long term plans being implemented. I managed to have a bit of time with teh Mayor when I first arrived as she was welcoming the new teaching staff to GEraldton. (Very nice of her…)

Things are happening here and I can tell you what, what other town or city do you get three major resources happening? Mining, fishing and farming!!??? Plus we have just scored the contract to send iron ore to china.

Don’t under-estimate the coastal city. I agree, I thought gero was a dump and just a place to “pass through to get to Kalbarri”, but my thoughts have very much changed since living here.

I’ve lived in Harlesden in London which has the worst instance of gun crime in the whole of the UK, so Geraldton is not that bad… As to Kenny Cres… I still don’t like that area… Bad vibes…

Steph.

Success is 1% inspiration and 99% perspiration.

When I bought in Geraldton (Sept 2003) my budget permitted me either a house in Rangeway/Spalding or a 1980s brick duplex half in Bluff Pt (7 min walk to beach and near all other facilities).

Neither would have been cashflow positive. At the time yields in ‘good’ areas like were commonly around 6-7% and maybe 8-9% in Rangeway or Spalding. Thus both would have been negatively geared.

Already having a higher yielding property (not in Geraldton) I chose the duplex half in the better suburb. Even back then the 8.3% yield stuck out as being better than for other properties in ‘good’ suburbs.

Yes it is negatively geared, but the advantages outweighed this (i. good stable tenant, ii. excellent suburb, iii. no body corp fees, iv. highly lettable according to local PMs, v. higher cap growth potential than Rangeway/Spalding).

To date I have not been disappointed and the property has been a pleasure to own!

The alternative, of a Rangeway house returning (maybe) 9% gross didn’t appeal so much. Even though there are some quite nice streets in Rangeway (eg Tuart St behind the shops), I would have wanted 10-11% yield and a brick property to compensate. That I couldn’t find when I was there, but those before me who did (around 2002/early 2003) have done well provided they had a good tenant.

Also my thinking at the time was that the price differential between properties in the ‘better’ areas and in the ‘worse’ areas was quite small when I visited. Since then investors targetting the cheaper areas would have made the difference even less, as Rangeway & Spalding prices rise.

But long-term, as interstate investors stop buying as yields in Geraldton drop to fairly ordinary levels (ie 5-6%), I think the differential between the better and worse suburbs will increase, with low capital growth in Rangeway/Spalding and higher growth in areas like Bluff Pt, Tarcoola Bch & Mahomets.

Rgds,

Peter