Investing in smaller towns

[Bear924]

Hi all,

I live in a small country town (5-6k people) in central Queensland. I have been living here for nearly 3 years now and in that time a new shopping centre has been built and the town has slowly grown. I am contemplating using a wrap type concept in this town to provide cash flow and then in about 3-5 years time purchasing a property in a major centre to keep for capital growth. The town services 2 mines, a power station and a meatworks as well as being a shopping 'mecha' for outlying areas.

I was hoping people may be able to give me their views on this possible strategy.

FYI - Property market ranges from 60K upto about 350K. A house that I would class as being 'half decent' rents out for about $200 per week and would sell for around $120k.

Thanks for any help!!

[Jas]

Originally posted by Bear924
Hi all,

I live in a small country town (5-6k people) in central Queensland.

It sounds liks a resaonable strategy, but the one thing that springs to mind is the town size. Many of the big banks don't like to lend to smaller than 10,000 pop.
Obviously, people in the town have loans, so try going to the local bank and see what kind of LVRs they offer. You might have to educate them on wraps thou.

Jas

[Bear924]

Thanks for your reply,
I still have to complete my own education on wraps, however I'm planning to get a wrap pack shortly. A friend who recently purchased a property in this town was able to get a loan with a 5% deposit. From my understanding the NAB has classed this area as a residential A class area... eg. expected capital growth in the next 5 years. Does anyone know how these residential classes are calculated or how you can find out what each bank has classed an area as?:)

[TheBacon]

I'd love to know how to get this info too if anyone knows....

TheBacon

[Rolf Latham]

Hi all

Its not the lenders that make the call. Its their Mortgage Insurers.

You can get 95 % lends in even little towns BUT much depends on the actual $ required.

Ta

Rolf