More of a question for capital growth…
When it comes to investing, what are the implications of investing in a “dodgy” suburb (i.e. lower education levels, lower incomes, more govt housing).
E.g. I’ve heard that acacia ridge in QLD is tipped to achieve capital growth but it seems to be surrounded by the “bad” suburbs (e.g. Inala, Woodridge). Does that make it a bad place to invest in? What are the factors involved?
Sometimes ‘bad’ areas can be great for cap growth.
St.Kilda, Richmond, Port Melbourne, Williamstown and Oakleigh come to mind in Melbourne.
About 3 years ago my sister-in-law bought a house for $92k in “The Pines” – a suburb of Frankston on the Mornington Peninsula southeast of Melb.
It was a bad suburb in a not -so-good bayside city. In 3 years she has doubled her money.
It has changed my views of dodgy suburbs to a degree.
There are some places that will always be bad, but if you can find an undervalued suburb in an area that is coming up, and with good public amenities, or near more expensive suburbs that are becoming unaffordable then these are the ones that can go well.
The trade-off is that you may get some bad tenants and damage etc, but everyone has to live somewhere and even poorer people in poorer areas are nice people.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Hi PochPoch,
The way I look at it is if the “dodgy” suburb has got the right infrastructure (in terms of transport, schools, shops, hospital, etc.) it will eventually pick up. In the long run there will be enough demand and therefore both rents and capital value will pick up. The answer lies in your investment timeframe. If you are expecting to make money quickly then it may not be such a good idea to buy in one of these “dodgy” suburbs.cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
Hi PochPoch,
I have a IP that i brought in Woodridge about 20 months ago, and have not had any trouble with it at all. I have had more trouble with the Real Estate Agent than anything!!
The property has increased in value by about $20k, i have increased the rent twice now, and i have had an excellent tenant who came to me 6 months before her last lease was due to expire asking to sign a new 12 months!!!
I know this may sound like a extreme case, but i did my due diligence when i was buying and it certainly paid off in the long run. Don’t be put of by other people talking down on so called “dodgy areas”, becasue investing is a financial decision and not a emotional one, and having this mindset when i purchased certainly paid of for me.
Cheers
rcrick
[hmm]
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