hello i was just wondering if anyone can give me some advice on city or country. i am new to this and yet to buy my first ip i was looking at a country town with approx. 15,000 population but not so sure now , property is cheap 100k but local r/e agents tell me they have problems with tenants in propertys at that price .. so maybe i should look at the city ??
Why buy in the country? Population growth is lower, and this would potentially limit capital growth
Terryw
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Positive Cashflow, that why the Country.
Thats all…..Some country areas offer affordability whereas the city equivalent may take more of your funds to get started. I think the most important factor is the tendancy towards sea & tree change. There are some who are searching for a change of life style and are going to the country to find it. Often retirees make this choice. Your IP may not be of interest to these tree changers but the ripple effect would contribute to sustaining prices and rent. Many of these smaller places have a rental market economic that is more lucrative than city markets because the competition is not so fierce. With a clean property and sensible tenant screening you will enjoy a reasonable rental market in most small towns!
I have very successfully managed to invest in country properties for the past 3 years and would certainly encourage it. It is all relative and you do get some good and bad tenants both in the city and the country!!!!
good luck whatever you choose.
sq[biggrin]
Hi
My opinion is to look at why you are investing in the first place. If your aim is cash flow and you dont mind not getting capital growth then regional areas are great in that they will either cover your costs or cover them and give you some left over,or positive cash flow.
I have properties from 1000 people towns up to 10,000 and have had only minor problems. My keys are to make sure that there is an agent in town who can manage the property, be wary of properties where the agent says I wont manage it!! Stay away from them.
also be aware of properties where the agent does multiple jobs as their interests could be somewhat biased or miscued.
Originally posted by swiftos:Hi
My opinion is to look at why you are investing in the first place. If your aim is cash flow and you dont mind not getting capital growth then regional areas are great in that they will either cover your costs or cover them and give you some left over,or positive cash flow.
I have properties from 1000 people towns up to 10,000 and have had only minor problems. My keys are to make sure that there is an agent in town who can manage the property, be wary of properties where the agent says I wont manage it!! Stay away from them.
also be aware of properties where the agent does multiple jobs as their interests could be somewhat biased or miscued.
I think tenant problems are perceived (incorrectly) to be more likely in lower priced, lower class, and maybe rural areas. Not so.
I once had a brand new, gorgeous townhouse in a high rent area (good cap growth area too). The first tenant was a working mum with 2 kids. Always paid the rent, but they were nightmares and upset everyone in the complex. Glad to be rid of her.Cheers,
Marc.
[email protected]Originally posted by L.A Aussie:Originally posted by swiftos:Hi
My opinion is to look at why you are investing in the first place. If your aim is cash flow and you dont mind not getting capital growth then regional areas are great in that they will either cover your costs or cover them and give you some left over,or positive cash flow.
I have properties from 1000 people towns up to 10,000 and have had only minor problems. My keys are to make sure that there is an agent in town who can manage the property, be wary of properties where the agent says I wont manage it!! Stay away from them.
also be aware of properties where the agent does multiple jobs as their interests could be somewhat biased or miscued.
I think tenant problems are perceived (incorrectly) to be more likely in lower priced, lower class, and maybe rural areas. Not so.
I once had a brand new, gorgeous townhouse in a high rent area (good cap growth area too). The first tenant was a working mum with 2 kids. Always paid the rent, but they were nightmares and upset everyone in the complex. Glad to be rid of her.Cheers,
Marc.
[email protected]Of course that perception is a generalisation and with all generalisations you can find examples to disprove it as an absolute rule.
My main concern is that repairs cost more in the country. Travel time and shipping of material is higher although labour costs can be lower. Too small a town may not have a resident electrician or plumber or if it does then he lknows you have limited choices and charges accordingly.
More importantly is that the same repair (even at the same cost) is a higher % of the yield on a cheapie. ie a $1000 HWS may not be too big a deal if the rent is $400pw but if it is $110 pw then it will hurt a bit more and may even make that pos geared beauty into a neg geared dog with no capital growth.
Of course this is a generalisation and I bet someone has an example that is the opposite [biggrin]
Simon Macks
Residential and Commercial Finance Broker
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0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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