To be fair the market can change in 2 years, maybe not such good value now.
2013 Lomas Hotspots
- Thread starter Elliotte
- Start date
To be fair the market can change in 2 years, maybe not such good value now.
3 years plus, yes I agree,
but for an area to go from hot spot to a dud spot so quickly in my eyes means the spruiker is a bit of a dud, or something catastrophic, unforseen and unlucky has occured.............you be the judge
hindsight is a wonderful thing
the only thing certain in life are death and taxes,
that being said, I would expect these so called experts to be more correct then incorrect, esepcially if they are riding on this reputation
I bought 3 IPs in areas previously recommended by Margaret Lomas but I have to say that the growth has been fairly underwhelming so far:
1. Werribee (outer-west suburb of Melbourne, Vic) bought 8 years ago. Capital gain 3.1% average per annum. Rental increase 4.6% pa.
2. California Gully (suburb of Bendigo, regional Vic) bought 4.5 years ago. Capital gain 2.3% pa. Rental increase 1.6% pa.
3. Davoren Park (outer-north suburb of Adelaide, SA) bought 4 years ago. Capital loss (has dropped in value) -1.6% pa. Rental increase 0.8% pa.
I believe that one of the problems has been too much supply of rental housing stock in these areas, flooding the market and keeping rents & capital values down. Land is not scarce in these areas so its easy to build new houses. Also, interest rates have remained low, so more investors have bought properties to rent out.
Damn, that stings. Do you still own all three? What would you do differently next time?
When you say Margaret has recommended these properties did you buy when she recommended them or after?
I don't mind Margaret, they're defined as 'Hotspots' but her strategy isn't short term it's buy and hold. Most are in areas with good rental yield with diversed industries.
I would suggest that most of these are either close to neutral or CF+
Are you able to share the purchase price and current value of these properties, and where they valued by bank or REA?
Also people often think buying into a 'hotspot' means buying anything, it's hard to have CG if you have overpaid to begin with. Not saying this is the case in point but often happens and Margaret has mentioned this.
Yes Rizzle, I still own all three. Cashflow was my main goal and I am getting yields of between 6.27% and 6.77% on these properties, which is OK given the current climate and my risk profile.
However, I also hoped to get a decent amount of capital/rental growth by following Margaret Lomas' methods. And I have been a little disappointed with my results in that aspect so far.
What would I do differently? More research about likely future supply of rental housing in the area. However, instead of buying further properties, I have chosen to diversify by buying some high yield shares.
Yes Brady, these properties are cashflow neutral for me and I intend to hold long term. It will be interesting to see how the growth figures turn out after ten years - which is the length of time Margaret reckons smooths out returns.
The valuations are just from rates notices, so just ballpark figures. The rents are actuals.
I bought Cal. Gully & Dav. Park whilst I was a client of her company, based on their advice about location and price. I bought Werribee a while before she recommended it.
However, I also hoped to get a decent amount of capital/rental growth by following Margaret Lomas' methods. And I have been a little disappointed with my results in that aspect so far.
What would I do differently? More research about likely future supply of rental housing in the area. However, instead of buying further properties, I have chosen to diversify by buying some high yield shares.
Yes Brady, these properties are cashflow neutral for me and I intend to hold long term. It will be interesting to see how the growth figures turn out after ten years - which is the length of time Margaret reckons smooths out returns.
The valuations are just from rates notices, so just ballpark figures. The rents are actuals.
I bought Cal. Gully & Dav. Park whilst I was a client of her company, based on their advice about location and price. I bought Werribee a while before she recommended it.
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From rates notice you serious? Don't know about interstate as I just pay the bills on interstate properties and don't look at council value amount... But for my SA clients council rates are normally 10-20% below on average.
Maybe worth looking at some comparable sales and getting actual valuations.
Davoren Park has suffered a lot from the Playford Alive land release. I think the urban renewal program throughout that whole area will make a difference long term (it always been the end of the earth out there) which is why we just bought in Munno Para which is down fifteen percent over three years or so. You buy at the bottom of the market not at the top of it. People buying into sydney as an investment certainly don't understand this. I reckon Davo and those sort of areas are reasonably safe long term bets, they are cheap, Adelaide has strong rental demand generally and I think the renewal program and improvements in infrastructure links (NEXY, the Northern Connector and South Road upgrade) will also add value.
I bought into Bathurst as well, little bit after her recommendation, still while recommended. Haven't got a bank val done yet will be happening March 2015. But looking at comparables I'm smiling.
When did you buy into Bathurst how long ago? Where in Bathurst? What type of property?
Lomas' comments on hotspotting?
An interesting article I read in Property Observer where at one point Margaret appears to almost ridicule hotspotting!
Reading the article further, Margaret shows some of her criteria when choosing a location as a hotspot - http://www.propertyobserver.com.au/...erm=0_a523fbfccb-7b4e08f489-245480429&start=1
An interesting article I read in Property Observer where at one point Margaret appears to almost ridicule hotspotting!
Reading the article further, Margaret shows some of her criteria when choosing a location as a hotspot - http://www.propertyobserver.com.au/...erm=0_a523fbfccb-7b4e08f489-245480429&start=1
Hi Brady, I'll be heading to Bathurst in the nex week or two to look at properties but i think I'm going to be disappointed. Everything is selling pretty quickly and I think I missed the boat. Do you agree. There's not much around close to the cbd for less than $300k. And even with a Reno I reckon they'd have to be cf negative.
yep, boat has long sailed on bathurst in my opinion.
Long term it will be ok, but its a spill over suburb from sydney (yes a big spill over)
Properties selling like hotcakes
I bought in West Bathurst 22/11/2012 so just about 2 years ago. I bought a 3 bedroom 2 bathroom double garage highset brick for $265,000. It's been tenanted from day 1 with 2 rental increases. I completely agree that there isn't much under $300,000 which I really like struggle to find any 2 bathroom places at all under $300k.
Long term I think Bathurst is great, exactly why I bought there. So far been a excellent set and forget,. Can't remember the last time I did anything except for collect rent with that property (touch wood). As to whether now is good time to enter the Bathurst market, I don't know. After buying the property it crossed my mind that the boat had already sailed, but looking at comparables possible that was some steam left, time will tell.... well March valuation.
struggle to find any 2 bathroom places at all under $300k. Long term I think Bathurst is great, exactly why I bought there. So far been a excellent set and forget,. Can't remember the last time I did anything except for collect rent with that property (touch wood). As to whether now is good time to enter the Bathurst market, I don't know. After buying the property it crossed my mind that the boat had already sailed, but looking at comparables possible that was some steam left, time will tell.... well March valuation.
