What do people expect in the way of returns on units/houses in a regional city??I am not talking about the people on this forum – they are smart enough to look for better returns. I am talking about an average “investor” who wishes to play safe, buy and hold.
Are people still negatively gearing?? Do they expect to get any more than 5%gross?? I know that many cap cities are offering no more than 2 or 3 percent!
I am asking for help because I am trying to structure an investment I have and I need to know what it is worth. I am working on the assumption that it’s value is a function of it’s return.e.g. if the house is returning 10k p.a. it should be worth 200k if returns are usually 5%.
I know there are many other factors in valuing a place and I want to take those into account too, but I need people’s opinions on this aspect of a property’s value.
My investment is units in Toowoomba Qld.I have yet to find a real estate agent who is any help.
Can anyone out there help?
Cheers
Giddodepending where
rural should be in the region of 10 to 12%
city cbd(syd 5% bris 4% mel 5%) commcercial 7% to 12% cbd
your asking how long is a piece of string and it could be elastic
If you are evaluating an investment there are alot more to look at then the post code.
sorry to be hard but probably the reason no real estate has told you is because you are asking the wrong question.
If they were so good then they would be the investor.
I evaluate properties 3 out of 5 days.
The return is only part of the value.
You need to do alot of homework on where your investment is.here to help
I have seen people buy properties on 3% returns and be happy with it because the property is going to go up in value [blink]
You could try and ring a buyers agent and ask them what is the best yield they can find for you in that area as an investment property.
We buy properties in all conditions. Can offer Immediate Cash Settlements, No Real Estate Agents Required
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phone 0412 437 582Hi giddo,
Unfortunately people on this forum can give only their own views and not those of the average investor. It is hard to know what the average investor is, and even harder to determine how (s)he may think either collectively or individually.
I am working on the assumption that it’s value is a function of it’s return.I think that strictly speaking its value is a function of demand rather than simply return. Some investors may interpret high returns as high risk for example. Apart from investors there are other people who buy property as their PPOR and so returns may not be relevant to them.
You can get information about the yeilds in the particular area of Toowoomba and use that as a guide in determining your strategy.
There are still people negatively gearing. In fact in the current market with the returns the way they are in metropolitan areas the great majority of purchases are currently negatively geared. A number of my colleagues continue to do so because their philosophy is based on capital growth. But over the past twenty years or so, the most they have been able to do is to have up to three properties at any given time.
Risk vs return applies to the seller as well as the buyer. Maybe you should determine the level of risk with which you are comfortable and determine the return you are prepared to accept on the basis of this, rather than what others might think with little knowledge of your proprety, your situation, and a different risk profile.
Chhers
pr
Thank you all, very sensible replies. I am asking the wrong questions, and looking for the easy way out perhaps.
thanks again.
GiddoThe best question is how and were you want this investment to be in 5 years ( cash flow (positve ip), reduce your tax (negative ip)growth (usuanly negative but depending where can be neutral))
(leveraging using it as a spring board to other investments).If you read my post to the guy staying at home and my sugestion to buy four houses and why, thats leveraging.
There are so many different reasons and ways of getting the investment you want, the advice here is general and should be.
Read on the different types and see which suits you and your business model.
I sleep holding alot of debt with a view for growth and leverage, some other probably would be happy with lots of high paying tenents with little growth.
Its your choice
here to help
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