Hi Goldenchild, Congratulations on your investment. Curious, how old is the IP?
Golden Bay has performed extremely well like most areas on this coastal strip. From what experts say it will just keep going up. Yippie.
$160 p.w. rental income, this is highly negatively geared, but pretty much normal in this current environment.
Will this commitment be a problem for further investments? Are there any ways of increasing rental income?
All
Yes it stinks here in Mandurah, it’s horrid, it’s awful, whatever you do don’t come here!
Seriously though the only smell these days is the smell of car fumes when the traffic gridlocks.
Mandurah has had astonishing growth in the last 4 years. I believe that it is grossly overvalued however I have been saying that for 2 years so what would I know.The rate of growth in population has exceeded the capacity of the infrastructure. There are twice as many people here as there were ten years ago but half the number of pubs. This situation is being rectified with the redevelopment of the Brighton Hotel and Peninsula Hotel.
The town centre road system is a major screw up as is the dual carriageway with multiple traffic lights. Both of these items are scheduled to be sorted. The council plans for the town centre are quite impressive.
The average income in Mandurah is low, so the rental rates are also low. Much of the population are retirees (not the wealthy type either) who don’t pay top dollar for anything, or the unemployed.
Many of the purchasers of the top end properties are from out of town and will not be living here full time I predict. A trip around Port Mandurah during the week confirms this.
I have just sold a 4 bed 2 bath brick tile house in Dudley Park for 245K. It rented for $200 PW. A friend has an 850K apartment in the Ocean Marina and gets $350 PW for it. There is an upper limit to achievable rental and it is around $350 PW.
As for Golden Bay, I looked at it but decided against investing there because no train station was planned for the location. It’s definitely in the growth corridor though.One other plus is you don’t cop the MRIT on your Land Tax bill in Mandurah.
Will the growth continue? I don’t know but it certainly doesn’t appear to be stopping at the moment.
Regards
Clive
The house was built in 1986 double brick on a concrete slab. The property is currently quite highly negatively geared, but I am not going to buy another place this year, 2005.
2005 for me will be a year for consolidation.
I bought the place in Golden Bay in November 2004 and prior to that purchased a place in Hobart in 2003 showed capital growth of 40% last year and caused an increase in rent of $30 per week.
I am not that keen on higher risk properties in regional centres etc. I try to purchase in good quality areas which appear to be undervalued. I think Golden Bay is such a place. There is no sewer, which keeps rates low for the moment and the impending train and freeway will only make Golden Bay more attractive.
By the way I’d like to mention that I have bought all my IP’s sight unseen and over the internet. I myself live in Melbourne in a Blackburn in a dump which we bought and renovated. We took a $165K house and after renovations had the bank revalue it at $750K. My other belief is quality thoughtful renovation is sure to add value beyond the sum of the materials and labour.
Hello People,
I know it’s a bit further south than Mandurah, but what are your thoughts on Bunbury and it’s potential?
Bigfella
Bigfella
I used to dislike Bunbury. It was a town planning disaster but I have changed my opinion now.
The town centre is alive and vibrant and there are some really nice older houses in the back streets on large blocks.
It’s handy to the wine region also.I think you could do much worse.
Clive
I went for yet another drive through Mandurah on the weekend…. the changes are amazing. There really is no place with similar attributes that is so easily accessible to Perth. The marina is stunning. Central Mandurah is looking cheap, triplex blocks still available for around $320k. The new releases at places like Madora Bay, Singleton etc are very very cheap.. $130k for coastal blocks!! The poverty factor is slowly changing as it blends into the Perth area. I still see the strip from Rockingham to Mandurah as promising the highest growth in the Perth area – a long way to go up yet from these give away prices.
http://www.megainvestments.com.au
Extensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
Showmethemoney, do you think Mandurah is turning into a retirement village for Perth oldies?
$350/week for 825K apartment!!! Even in Sydney (which is one of the lowest yield???) you get $500-600/week for that price apartment.Thats why the railway took so long, everyone thought Mandurah was full of pensioners who went crabbing all day long.[blink]
Seriously though, $800,000 for unit – $350. pw rent, that’s ridiculous. Gotta be better ways to invest that kind of money.Hi All,
Used to go to Mandurah as a kid in the 80’s, and now just to visit Dad in his villa.He bought a 2 bed villa in 2001 for $85k ($25k from me), and now it is worth somwehere around $130. But he’s there for the duration, so I’ll let it sit.
BTW – the reason the Eastury used to stink was it clogged up with algal growths. There were the result of excessive fertilizer running off from surrounding agricultural properties. As the eastury is shallow and warm, the algie just bloomed. The Dawsville cut was the result of trying to flush it through. I can remember when Dawsville was just a petrol station and a small caravan park.
Also, back in the 80’s, my grandad had a property with a shack on it in Miami beach. He knocked it down and built a large house for retirement, then developed heart trouble and had to move somewhere closer to Perth for the treatment. Basically, he couldn’t get what he wanted for the house – classic overcapitalisation. But I guess that only matters if you want to sell.
Davidel
Hi Marissa, Hi Purple Kiss, havent seen you guys on for a while. The issue none oif you have raised is the asbestos fencing that was used in all of these areas up until about 10 years ago and is now slowly being replaced by Super6, the asbestos looking corrugated fencing that is non toxic. For a novice investor watch out as it is hard to tell the difference.
Make sure any new investment has this covered in your building report. Good Luck all. C’mon the railway.
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Hi DD,
Nice to know we were missed! A spot of renovating kept me busy.
Yes hard to tell the difference. The Super 6 over here, is now being replaced by Hardi Fence sheets.
So while Asbetos and Super 6 are held to tell between, the Hardi Fence sheet is reasonably easy to tell the difference as the corrigations are much larger.
Yes com’on the railway, does that mean you have an IP down that way too?
Regards
PKHi DD, good to hear from you, always enjoy reading your posts.
How are you Perth IPs going?
I am currently looking at selling one of my IPs and buying 2 in different area, looking at figures at the moment. Current rents are still very low though.
Regards, Marisa[biggrin]
PK
I’m with you come on railway.Rents are the slowest moving in the country south of Perth anyway. There is so much available land that house prices wont feel too much of a squeeze for some time.
With stagnant rents, rediculous agent fees and high maintainance for older properties, we have just sold one 4 bedder in Orelia and are using the funds to paydown a qld ip instead.
Bought it for $91k sold it for $149k so yeah cashing in was ok as there was never one rent increase in the 20 months we have owned it.
We have also bought 2 more townhouses in Qld Dec/Jan so thats where most of the focus is now.
Good luck with your sales and happy investing.
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Good Point there DD. We’ve just had a $5 a week increase on our Mandurah property, but that’s been the first increase after 2 years. So agree, rents are very slow to increase here at present.
Good lcuk with Qld.
PK
Thanks PK will be doing the renos on these two in June/July this year when leases are up. Usual 5K then $30.00/wk rent rise.
Chat soon
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Low rent aside, where do you think the best change for capital growth 5-10 years from now for property around 250K in Mandurah?
There is only one place to look at in WA…
GERALDTON, GERALDTON, GERALDTON!!!
Has anyone even bothered taking a look yet?
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksI would go for central mandurah… it still looks cheap compared to the new surrounding suburbs. the extra dwellings that are forecast to be built around them will make them even more scarce over the long term. buy something with rezoning potential and you may get a pleasant bonus.
http://www.megainvestments.com.auJohn Carroll
Originally posted by The Mortgage Adviser:There is only one place to look at in WA…
GERALDTON, GERALDTON, GERALDTON!!!
Has anyone even bothered taking a look yet?
OK, I’ll bite.[biggrin]
I must admit Geraldton has spurted along the last 12 months: after being pretty much flat:
All 2 B/R 3 B/R
2001 $110 $84 $94
2002 $132 $85 $126
2003 $135 $87 $132
2004 $138 $96 $146
2005 $180 $123 $156Compare those prices with what you’d be paying in Mandurah. You’d get 2 in G compared to M.
But what is the upside for investing in G as opposed to M? How much more upside has G got over M?[blink]
Me feels the G rise is more investor related compared to M which is more lifestyle related.
I would think M would be more sustainable the G due to the lifestyle.
However, there is the expanded port and talks of iron ore shipped into a new port north of G (Oakajee???) as possibly the main speculative drivers. M essentially has the rail and lifestyle and that is it.
Maybe toss a coin and go with that?[tired]
Later………..
All things are possible to the person who believes they are possible.
Whateve the mind of man can conceive and believe, the mind can achieve.
Napoleon Hill.
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