I am looking to invest in my first property sometime soon… I believe it is best to start off small and have been looking on the net at cheap properties in Tassie, ie Roseberry & Queenstown approx 60-70K.
Rental market there is patchy at the moment but with increased mine activity projected at the end of the year and in the future do you think this would be a good investment.
Some properties I have looked at have been renting for $140 and could be bought @ 70K????
Would I be wise to forfeit my $7,000 home owners grant and invest in an investment property as I live in melbourne and prices so expensive here.
Regards
Sarah (very confused and overwhelmed at all my options) [strum]
Hi Sarah,
I live in Tassie and i wouldnt bother about investing in places like queenstown.. I would look more in the Norther suberbs of hobart e.g glenorchy, moonah, west moonah, claremont as you can get some good returns there or even go to launceston area..
Matt
Hi Sarah.
Aside from tourism, what has Tassie got to fuel growth? I’m not being rude to Tassie here (it’s one of the most beautiful places in the world) but for my investment dollar your options for future growth might well be improved by looking elsewhere elsewhere.
Have a look at Adelaide. Cheap real estate compared to the rest of the country and with the Howard Government pushing nuclear energy there very well may be strong growth there in the next 5-10 years as uranium mining companies look to move operations in.
Just a couple thoughts.
Art
‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Hi Sarah,
I remember an investo talking about investing in Queenstown in the API magazine. There is no real estate agents in the area so it is impossible to have a property manager and you are left to fend for yourself. Trying to get interest in a very isolated rural Tasmanian town is harder then expected. Capital growth in the area is relatively poor as well due to the lack of investor interest. As far as I remember this property was on sold 3 mths after settlement due to situation.
You must also look at what a lender would be willing to do in the area. Maybe call some lenders to ascertain an LVR that is available because the poorer the location the lesser it will be.
But, Sarah in relation to Tasmania it is improving and may be a future hot spot as it was a couple of years ago. As they say you need to go with your instincts.
Andrew [thumbsupanim]
Sarah, I highly recommend avoiding Roseberry and Queesnstown. We rode our bikes through there years ago before the mine re-opened, the place was a ghost town. Queenstown is only marginally better but toooo many properties available. And there is no property manager in the area. We have successfully invested in Launceston, Somerset and Wynyard. Launceston and Somerset are getting noice returns and the Wynyard is across the road from a beautiful beach. Beware of the housing commission area Ravenswood in Launcestion, good returns but it will take a while before the housing commission offloads the properties – I suppose the captial growth is definitely there in the longer term.
For your first IP I recommend a stock standard dwelling. Why not Melton?, great entry prices and the stigma of the place should disappear in the medium term. Just need a bit more rental growth, but I reckon that will happen. Another opportunity is a regional city ie Albury/Wodonga. Albury, some dwellings arew advertised at 5.5-6.5% return, then if you haggle you’ll get another 1-1.5%. Wodonga’s yield is just a bit lower but we are still looking!
Best of luck.
Hi Sarah. Agree about the inner west coast Tassie mining towns. But the area on the North coast, between Wynyard and Devonport seems ok, and I think parts of Launceston would be good to buy, although I have not looked there. Done a bit of sniffing around over that way, but Burnie area is pretty hard to beat for value I think. Tight rental there at the moment. Smithton could be interesting in the future too. There are parts of most areas it is good to give a wide berth to though, but you can usually get a basic idea by the price to house quality, and a generally question to a good real estate agent over there…..ie. You are interested in looking at a property there, very approx price range, and say you have not looked at anything specific but are there any areas in the town you are looking at that they would class a ‘not good’, and they will usually tell you. After all, they want you back. (supposedly!) All the best if you buy there. [specool]
Are Queenstown and Roseberry props 60 to $70 now?
I remember researching there in mid 2004 and most of them were 35 to 40K.
.I would say if u were in the area yr self and got on the ground and advertised as a private buyer lookin for props you could pick up some cheapies (needing work)and add a bit of value then re sell them.
This would be the way i would attempt investing in areas like this.just making some quick cash by turning a few over then move on to areas that will see capitol growth.
Unless u could get a reliable manager to look after yr propertys and they were making good cashflow(eg buy for 30 to 40K spend 5 K to rehab , then rent for $140(From memory was suggested)
.For example of a property manager u may be able to connect up with a retired gentlemen who would be happy for some extra income looking after yr propertys.
LukePS Sarah u dont forfeit yr first home buyers grant if u buy an investment property.You just cant claim it till u buy yr first PPOR.
We’ve got 70 yrs on planet earth,Lets make the most of every day!
Luke Taylor | Hope Property Investing
http://hopepropertyinvesting.com
Email MeProperty Support,Strategist and Buyers Agent
Anything west of Burnie is to be avoided. Burnie with 20k pop and Devonport close by with 25k pop are the best top end of tas locations. Burnie rentals have been slow compared to other towns to rise. So for an average $125k purchase you would still only get $140-155/wk rent there.
Ravenswood in Launceston actually did have about 40% of all of the housing commission houses sold off about 6 or 7 years ago so now its a better mix of owners and renters. There are 2 sections of Ravenswood as well so if doing research I suggest doing it properly.
We have 1 in Ravenswood, 2 in Rocherlea and 2 in Waverley, all suburbs of Launceston. With its status as the second largest town in tas, and Georgetown 20 mins north having a pricing boom as well due to the forthcoming timber mill and 500 new jobs, the top end older housing commission suburbs have an added appeal.
Tassie can be very bad(west coast) without any agent being brave enough with the changing fortunes of the mining industry, to even have an office there. Alternatively, buying 3 years ago for $72k and $88k for our first 2 in Launceston, now valued at $140k and $155k and both of the rents going up to $160 and $170 this coming month (September), all is looking good.
But either do a hell of a lot of research yourself or use the services of someone who has already done it for you like a buyers agent.
Whatever you choose to do, happy hunting.
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!Hi! I am also new to this. Have our PPoR and just refinanced to allow for property investment. I have wanted to move to Tassie for years and will finally be doing so at the end of the year (Yay!).
Many people have said that the best places to buy IP’s are near to where you live so that you can keep an eye on your investments.
I read recently (I think it was in Steve’s book) that the land tax and property management fees are much higher in Tasmania.Can anyone help with what this means in real terms (ie how much more) than mainland. Thanks
Land tax in tassie is on the first $1.00 of properties bought for investment purposes, there is no threshold like in Qld. If its not your PPOR it gets hit with land tax.
Secondly the higher management dfees in tassie is right. They usually are 8.8% and there is a 2 week letting fee not 1 as in the other eastern seaboard states.
However I do a lot of business in Launceston and can get 7.7% for my clents even on a one off basis. Cant get out of the higher letting fee though.
Thats about it. Land tax calculators you could fins on the web so maybe adding a couple of hundred a year to your holding costs calcs would be a good idea.
WA is worse for charges and fees. When everything was deregualted there, instead of price competitiveness the local agents who think they are gods gift put all their rates up.
So now you may get 8.8% in WA but you also get the cheek of them demanding $66.00 initial inspection fee, $45.00 qtrly inspection fee and 2.5% on top of any tradesmans invoice as a referral fee. Totally rude if you ask me and this is from having 2 over there until recently.
So tassie isnt that bad after all!!!
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!Prices in Queenstown, Zeehan and Rosebery have already boomed (by their standards).
Queenstown relies on its old copper mine (a shadow if its former self) and a nearby gold mine, which will close in 18 months to two years if a new buyer cannot be found. But there is talk the copper mine will keep plugging away for a few years yet. There were actually some positively-geared apartments (former motel units) advertised recently.
Zeehan has a new mine and a reopened mine nearby which have good contracts with the Chinese. The place was a ghost town before these came back on line.
Rosebery's mine is healthy at the moment. A lot of people work there and travel back to the North-West Coast after their block of shifts.
Queenstown has a bit of tourism but most of that goes to Strahan, about 35 minutes away on the coast. Zeehan and Rosebery have nothing but mining, so if the industry goes belly up, so do the towns.
Unsavoury tenants can be a problem, particularly, as mentioned, there are no property managers on the West Coast.
It's a pretty tight rental market on the North-West, from all accounts.
Artaud wrote:Cheap real estate compared to the rest of the country and with the Howard Government pushing nuclear energy there very well may be strong growth there in the next 5-10 years as uranium mining companies look to move operations in.Hey Art, didn't we change governments? Don't we have a greeny musician as an environment minister now? Not sure how nuclear sits with those 2:)
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