All Topics / Creative Investing / Investing in low income areas

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  • Profile photo of RobbiePRobbieP
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    @robbiep
    Join Date: 2010
    Post Count: 108

    Hi All,

    I was wondering if there are any investors out there who have invested in the low income areas around Australia which are probably deemed 'high risk'?

    I would be very intersted to hear your experiences.

    Look forward to hearing from you.

    Regards,
    Robbie

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    I’m sure there’s quite a few investing in these areas on the forum :)

    I don’t have a problem with investing in low income areas. There are risk mitigators such as landlord insurance and using a “good” property manager.

    In general, the yields in these areas are usually quite good while the growth may not be that spectacular.

    If you get purchase something at a decent price, add value to it and attract “decent” tenants than you’re onto a winner in my opinion.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
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    Profile photo of RobbiePRobbieP
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    @robbiep
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    Thanks Jamie,

    Can you think of a few interesting areas off the top of your head?

    As i have just moved to Australia, I am only just barely familiar with a handfull of area in Sydney :P

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Orange, NSW

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of Tony FlemingTony Fleming
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    @the-dark-knight
    Join Date: 2008
    Post Count: 396

    Hey Robbie,
                          I invest in low income areas .Kingswood, St Mary's, Penrith, Cranebrook and possibly Mount Druitt(if your game enough), Also Richard above is right, Orange is a good area as well as tamworth. Something  important to do when looking for a property in a low income area is to try and target tenants that have being long term and have kept the place in tidy condition. They'll stay on and you don;t have to worry about getting a dodgy tenant. :) Hope this helps

    Tony

    Tony Fleming | Triumphant Property Group
    http://www.triumphantpropertygroup.com.au
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    NSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
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    Wagga, wagga
    West Sydney (St Mary’s, Mount Druit, etc)
    Logan area of SE Qld
    North Adelaide (Elizabeth)

    I like Queanbeyan, NSW as well (for units). I wouldn’t say it was dodgy though (I’m sure others will argue the opposite)- I live just across the border :)

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
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    Profile photo of angelinsydneyangelinsydney
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    @angelinsydney
    Join Date: 2011
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    Hi robbieP,

    Is there any specific reason you want to buy in low income areas?

    If you are looking for a good rental return and high capital growth, the Northern Beaches is ideal. 

    Angel

    Profile photo of RobbiePRobbieP
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    @robbiep
    Join Date: 2010
    Post Count: 108

    Thanks for the adice.

    Adt this stage I am looking to get into the property market and looking for properties under $200k, which is defintely possible,

    Are the any areas you can recomend as I doubt the northern beaches would have property under $200k.

    Back to my initial question, are you aware of any 'low income' area in NSW or the rest of Australa?

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
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    Hi Robbie

    Check out the back of an API or YIP magazine as well. They show the median prices in each suburb in each state. They also provide rental yield figures. This will help you initially locate some areas.

    You could also do a refined search on realestate.com.au

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Profile photo of ALF1ALF1
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    @alf1
    Join Date: 2011
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    Hi Robbie.
    You want to buy cheap then look no further than Davoran Park, Smithfield or parts of Elizabeth in Adelaide's northern suburbs. By cheap, I mean you can still buy a Torrens Titled 3 bedroom ex SA Housing Trust Duplex for under (YES, less than) $150,000. This section of Davoran Park is <moderator: delete language> but there is more and more 'new' money coming into the area as well as new housing estates so capital growth will happen and is happening. Adelaide is still the cheapest median housed property market on mainland Australia so if it's cheap you want then there are certainly parts of Adelaide to have a look at.

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
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    Hi Anthony

    What sort of rents are those $150k places getting? What do the vacancy rates look like?

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of ALF1ALF1
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    @alf1
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    Hi Jamie.

    Instant positive cash flow as the rents typically fall between $180 -$250/week. Because of the very low demographics – predominately retirees on an Aged Pension, tenants on DSP or Dole and very low wage earners- vacancy rates are never above about 0.8% Yes, always less than 1%. It ius just too cheap to rent almost anywhere else so they don't stay vacant for long. Ideally, what alot of investors try and do is buy the double duplex that is joined, bulldoze, and build 2 new free standing homes that are already Torrens Titled. But Jamie, as lucrative as this may sound, 'caveat emptor'. As a Buyer's Agent, I personally check out a prospective property in areas of the Playford Council such as Davoran Park first because, just are there as some real diamonds amongst the rough, there are a LOT of just 'rough'.

    Profile photo of ALF1ALF1
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    @alf1
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    PS Jamie.
    The now famous ' Young Gun' May edition of API magazine lists Davoran Park House median at $205K based on 105 sales and a median rental of $220/week.

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
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    Excellent, thanks for the info Anthony. I’ll keep my eye on in it – I’m sure I’ll have a few more questions in the mean time.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Paul DobsonPaul Dobson
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    @pauldobson
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    In the Hunter Region of NSW you could have a look at Raymond Terrace, Glendale and Argenton.

    Cheers,  Paul

    Paul Dobson | Vendor Finance Institute
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    Profile photo of RobbiePRobbieP
    Member
    @robbiep
    Join Date: 2010
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    Thanks all, much appreciated!

    Profile photo of ALF1ALF1
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    @alf1
    Join Date: 2011
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    For all you novice investors PLEASE get yourself a copy of Australian Property Investor magazine and you'll get more knowledge than you'll know what to handle. It, like this forum, is a GREAT place to start your education!

    Profile photo of lbluedentolbluedento
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    @lbluedento
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    Just pick your street Jamie, there are parts of Davoren Park that I would invest in and parts I’d steer well clear of. The area is part of a govt initiative called Playford Alive and the aim is to rejuvenate the area and get rid of its reputation. I have been along streets however where you’d be hard pressed to find a sheet of glass in a front window! I almost bought a duplex in South Elizabeth for $130k each side, unfortunately I wasn’t fast enough :) You can certainly find duplexes (as in both sides – 2 titles and approx 1000sqm) for $300K still in this area.

    Profile photo of ALF1ALF1
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    @alf1
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    So true ibluedento, so true. Cheap, but ALOT of potential nasty there too!

    Profile photo of ajayayyarajayayyar
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    @ajayayyar
    Join Date: 2005
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    Hi Robbie,

    I would recommend Tamworth – I recently purchased there.  You will need to look around hard to find a good property at your pricepoint however somewhere around the Westdale area would be recommended, but try to find something in a "better part" of the area.

    Regards,
    Ajay

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