Hi everyone
Im looking to purchase my second investment property this time in tasmania.
Im looking at 2 areas because its within my price range of 150k and under. Ravenswood and Georgetown.
Id really like to purchase in Georgetown but i think ravenswood is better for rental return. I would really appreciate any input or suggestions on another area :)What net yield are you trying to achieve Lorella?
The Georgetown demographics are pretty low. But I think that’s where you get good yield from. Correct me if I’m wrong anywhere.
At the risk of sounding really silly Im not sure on what yield im trying to achieve. Basically we bought an investment property in Brisbane and we had 150k left on our line of credit. I thought if we can stretch it we could by another property in tas .Somthing is better than nothing ?
These 2 areas are what we can afford. To be honest im leaning more towards georgetown because i can do more with my money.
Honestly property investment is very new to me and im just trying to build my portfolio while i can so any advice is really appreciated.
Hi Lorella,
Do you have an idea of the kind of rent the Tasmania properties would fetch? To be able to have it pay you something (be positive geared), the rent needs to cover the mortgage, insurance, rates, maintenance, and Real Estate Agent fees (i.e. all costs) and STILL have a bit left over.To do that, with a $150k property (and mortgage about the same) you would likely need a rent of $220 a week or better (I am guessing, but you use YOUR numbers, and tell me ;)
That is your Yield. $220 a week is 220 x 52 = $11,440 a year Divide that by $150k and multiply by 100 to get a percentage and you have 7.63% Yield. That SHOULD be enough to cover all costs in most situations, leaving you a small return for your $150k. Using a depreciation schedule can help to improve the cashflow too.
Anyway, I hope that gives you some idea of what others have been asking. You likely already have all the numbers you need to work out your Yield.
I can’t help at all re Tasmania – I hope others can,
Benny
One other thought – did you see this? It may hold some clues for you :-
https://www.propertyinvesting.com/topic/5010490-tasmania-is-it-worth-it/
Benny
Thanks benny. Well the house im currently looking at purchasing is actually 110 k and is rented at 200pw. But it looks like we will be able to purchase for 100k . So i think thats an average yield ?
I know population in low in Georgetown but its not a huge investment and i know if i dont purchase something ill just end up losing my motivation. I just really dont know much about tas so its hard :(
Hold on 200pw was for the property in ravenswood which is 130k. The property in Georgetown is 100k with 150pw
200pw was for the property in ravenswood which is 130k. The property in Georgetown is 100k with 150pw
So, which has the better yield? We don’t know the Nett Yield until all costs are known for each – but the Gross Yields are there :-
Ravenswood – Gross Yield is $10400 divided by $130k x 100 = 8.0%
Georgetown – Gross Yield is $7800 divided by $100k x 100 = 7.8%
The Nett Yields will be determined after all costs are known. It could be that the Ravenswood house has higher rates, or more maintenance required, thus higher expenses. In such a situation, the one with the better gross yield might become the one with the poorer Nett Yield.
Benny
Benny is spot on – the gross yield is a starting point but you really need to look at the NET yield to ensure the next property you purchase moves you closer to your end goal. Do you know the net yield that you need to achieve for the property to fit your investing strategy?
Whilst yields are strong in George Town, I don’t invest there personally as I am not willing to run the risk of either of the large employers scaling back or closing. There are certainly some areas of George Town that you wouldn’t touch. There is an agent who is very active in the George Town market who has sold property for us in Launceston who I can put you in touch with if you’d like to do more research.
Ravenswood is considered one of the rougher suburbs in Launceston and there are pockets there that would carry a fair bit of risk to invest in and would be a no go for me. Having siad that, some parts of Ravenswood would be ok (my Grandparents built there in the 1950s and lived in the ‘better’ part most of their lives) although there are other suburbs in Launceston who are stronger performers – it’s just a matter of doing your research.
Thankfully right now Tasmania’s unemployment rate is lower than both Queensland and South Australia!
Tracey im not sure what net yield im aiming for i just figured out my gross yield lol. I would love to know the better areas in both suburbs. Like i said im not limiting myself to these areas buts its really all i can afford at the moment. I would love to have your agent contact that would be great.
I have sent you Justin’s details in a Private Message. He will be able to give you current information on the best areas/streets within those suburbs.
Hi Tracey B could you forward me your agents details as well as I’m quiet interested in doing abit of research within Tas.
Thank you so much for all your help. We have decided to go with georgetown in the end. Thanks so much tracey for your contact i did actually call him ☺
Lorella how did you go with George Town property ??
Hi Jeta oddly enough I literally have just got back from Georgetown and my god its beautiful. We purchased for 90k with 150 rent pw. Iam very happy with it.
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