Just recived my latest API and on page 27 residex state they are 41 postcodes that meet the criteria for + cashflow properties criteria:
-must have pop of 2000 dwellings
-future growth rate > 5%
-gros rent yield > 5%
any takers on theses postcodes?
geraldton WA is my only one
glenn“I should be content to look at a mountain for what it is and not as a comment on my life” D. Ignatow
Hi recoveryman,
I didn´t know the mag was out yet. can you tell me what info it provided on Geraldton?
Here is a great article on Geraldton also from the mid-west economic policy summit. Best info I have found on geraldton.
http://www.economicsummit.com.au/ (click on the speakers notes)
regards,
karinaGlenn,
The Sept API just showed up Friday. The article doesn’t say anything particularly new (for people in this forum): CF+ properties are rare, far away from major centres and you won’t get much growth out of the places that are out there…if you can find them.
[baaa]
The thing the article was unclear on was the criteria of growth forecast >5% over what period of time. 3 years? 10 years? If it’s ten years, then the article is VERY negative. Otherwise, it’s just a warning to do your sums very carefully.
I don’t think Geraldton got a specific mention. Sam Saggers from ESC got a very optimistic blurb in for Kalgoorlie. He thought a 3bdrm townhouse could be obtained for $180K and rent for $360/wk. I think you’d need an exceptional property, but it wouldn’t be typical of the area.
Jireh
in Sydney(just)
j at jireh dot netGross rental yield >5% Well, yeah, wouldn’t it be more like >10% for CF+ ?
Quintets, I think you can get high yields in mining towns, and in outback towns where professionals work – doctors, nurses, teachers, etc. Those people generally don’t buy up for short contracts- they fly in and fly out (often to the locals’ annoyance). The properties are cheap as, and the rents are not so cheap. I paid rent in the outback that was more expensive than in the city.
kay henry
You may still find positive in Merredin, Westonia commencing in January. Regional Centre with about 5,000 pop. Lots happening in this wheatbelt area.
Houses are selling like hot cakes.[biggrin]
House – $42,000 with reno/etc – just rented
$115 pw. NO problem renting. Demand will be greater in January when extra accommodation required. I heard something like 500 houses required..hi all
I was only putting my thoughts on the postcodes which is geradlton that meet the criteria
API did not memtion any postcodes that is why I am asking what others think the postcodes are
glenn“I should be content to look at a mountain for what it is and not as a comment on my life” D. Ignatow
That API is a great read…
Especially the snapshot on Lismore and Dubbo.Rosebery, Tasmania offers great positive cashflow opportunities. I can help you enter this market, great for rookie investors looking to get their 1st, 2nd or third IP.
Yorker – have to disagree (Again) about Roseberry. Not the best place to be steering people to invest IMO. Do you have a vested interest in Roseberry to declare?
If your investing for growth its not so good, however if you use it for cash flow to fund the shortfall in your growth properties it can be very useful. I own a couple of properties there which fund the shortfall of one of my waterfront properties. For newbies the area is very affordable and actually appears to be growing (according to an article in the most recent API). I’ve had these properties for three years, during which time I’ve had no vacancy and two rental increases. Where is the downside good sir?
Anubis,
could you recommend an alternative i.e an area that all the newbies who ask “Where” to find positively geared property go start searching? Clearly noone ever answers the pleas of these people to isolate areas that may indeed show positive cashflow properties.
Yorker- heya,
I checked out some Rosebery homes. Below is one of the more expensive ones (quite pretty too, I think). Why I am putting up the link is because the rent is so cheap ($90 for a 3-bedder). This seems usual for the town- others have the same rent. This puts the property at about 3% yield. I know you are probably buying cheaper properties… but if one of the most expensive places in the town is getting rent of $90 a week, are the rents there extremely low?
As for me, rents at $90 a week would be too low- despite property price. $4680 annually would be eaten up by rates, management fees, mortgage costs, and possible repairs. Then you’re left with a house that may or may not achieve CG, and not much income being derived from it.
kay henry
That’s right, rental range is around $90 to $120 per week. I purchased the properties a while ago for around 30k each. They are not fantastic properties but they doprovide cashflow for other deals, shortfalls etc.
Hi Glenn,
I would suggest that no one is telling you what the 41 postodes are because they would be available from residex in one of their reports. Which I suspect is not cheap. If you really want to know, that would be the best place to find out – Residex
Cheers,
Sue [biggrin]“Be careful not to step on the flowers when you’re reaching for the stars”
Mr Recoveryman,
Here’s a way to DIY to find them. Circle all the cheap properties from each state as listed in the API Median Price Guide for states. Then go to the Median Rental Guide in the API mag. Match them up, and voila! If the rents are double the price or thereabouts (50k prop = $100 rent), then you are seeing CF+ properties.
You can pretty much DIY anything in research. Sue is right though- you could always go to the source. I can’t be bothered sourcing primary material. I like finding stuff myself- it gives me a sense of confidence (plus I can’t afford those guides, and they lose currency quickly).
On an API note… oh how nice it is to see they’re listing properties alphabetically now. It was harder to find them by postcode- onya API!
kay henry
Last year I bought that report from residex and even that time they had very few area returning 8%+ so isuspect they will be having much of cash flow post code there. But they will tell you how to get 5%+ return. if you check the other rental return reports in the same magazine you can guess all the areas.
Good luck
Cheers
PropertyGuRu
[sultan]Mortgage Consultant
As a property guru, wouldn’t you be able to predict hotspots without the aid of residex or other tools?
hi all
thanks for the help
I did not need the report I was just trying to get a discussion going, but thanks your ideas
glenn“I should be content to look at a mountain for what it is and not as a comment on my life” D. Ignatow
We have recently completed the building of three houses in Westonia for mine workers. It is expected that the mine will come into production and more houses will be built. There is rarely anything available for purchase and rental accomodation is not required at this stage but if a house comes up it might be worth looking at. It is a delightful friendly town that looks after its own problems, has a great swimming pool, sporting activities, school, real country town folk and is only 1/2 hour from Merredin.
If I knew then what I know now……….you know how it goes
Hi all
sorry off the topic a bit, i want to take up Yorkers constant promotion of rosebery as a buy, on the figure i see it the other way its a SELL.
this is why
say you buy a cheap house for $60,000 which rents for $90pw, there are heaps of these deals in Rosebery.
say you put in 20% and finance 80% which is 48K
Interest on the loan at 7% is 3,360
rates (high in tas) management insurance 2,000
But you get 4,500 income if let at 52 weeks a year
That means the home will be costing you $860 a year, plus any repair and maintence. If you want a Negative Geared property don’t buy west coast Tas.
So Kay is right the figure don’t stack up
regards westanI live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
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