Hello,
I need some urgent advice. I found an area with fairly low priced properties and around 7% – 8.8% annual yield. After some research I found that the main reason for such low prices is the number of Aboriginal families living in the area. Also the renting sentiment is quite low because of that, some properties being on the market for months. I’m told it depends on the street of the particular town. Population over 30,000. And now I’m stuck, I don’t know what to do. Could someone please give me some advice.
Cheers
RadekHi,
My advice would be to talk with local real estate agents who manage rental properties in the area. Also do some research into town planning or strategic growth plans of the council.For good or for bad perception is reality and house prices reflect that perception. That means for prices to rise, perception of value must rise and on a macro scale one investor is unlikely to do that. So if after talking with people on the ground you feel that the general perception is one where investment properties fair poorly then move your attention elsewhere.
The town next door might offer better opporunities, you never know…
Thank you surreyhughes19905. I actually acquired all this info from one of the property managers there. Apparently there are some good streets to buy and those properties get rented rather quickly. Also props there seem to be selling at a pretty fast rate. The town itself has exceptionally good growth rate.
hi radek
if you can pick up a bargain because of others stigma with the area, then that must be your gain!! do pick in areas that perhaps are not in the middle of the `problem areas’ and then you should do well.
eric
Hi Radek,
A few points come to mind.
1) I cannot understand how a locality with 30000 people is all ‘affected’ (from a real estate market pointof view) by local indigenous people. In my experience there may be suburbs that have a stigma – but a whole town?
2) If the stigma has affected the market sentiment at this stage of the game – is this likely to be continued when/if you look to sell, refinance or rent? Will this create major difficulties for you?
3) What does your research show?
4) If you have doubts now – how will your sleep at night test perform – post purchase?
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