Buying IP in Orange or Bathurst - advice needed please!!

C

crunchy

Hi,
My wife and I are keen to buy an IP but are new to the game.

We have a budget of approx 350k and after doing some looking have found some good properties in Orange and Bathurst that appear to offer some good returns eg: 3 br house, sub divided block (asking price 320000) returning 350pw situated in the new northern part of Orange. Or a 4 br home for anywhere between 330k to 350k that is looking at 400pw rent. Is this realistic rent or just agent hype?

We were just wondering if anyone has recent experience or info on buying in either town.

Should we focus more on new houses/townhouses closer to the CBD.

Orange appears to quite an active town and there appears to be quite a lot of activity (especially in the northern area). Bathurst also appears to growing well.

We've been up to both towns a few times recently and like the towns and the new building activity.

We would appreciate any advice people have on the area.

Regard

Crunchy
 
Why have you chosen Bathurst and orange? What is the reason for your investing? While I don't keep up with those markets much right now I thought they've both already had a bit of a mini boom?

For that sort of money I'd be buying a house in western Sydney needing a cosmetic reno to improve the rental yield.
 
I would have to agree with beachgurl. You can get much better yields in western sydney with scope of subdividing or developing the land at a later stage.
 
Part of the idea of looking at Bathurst and Orange was due to career paths and potential places to live but thanks for the advice about western sydney. We might have to change our focus and re evaluate what we actually want.

Regards

Crunchy
 
Where I am tending to get confused is when I read API and magazines like it or look online I see that the yields and growth for a place like Penrith = 5.0% for 5 yrs and then 3.6% for 10 year with 5.5 rental yield and when I look at Orange for example i see 3.3 for 5 years and then 7.8% for 10yrs with a 6% yield for rent.

We are looking at a buy and hold strategy and this is part of the reason I was attracted to Bathurst and Orange as it appeared that the stats looked better.

When I look in Orange I can get a 4br house for approx 330000-350000 that returns 380-400pw in rent. Looking at the Penrith region for example the prices and rents are about the same.

What factors are at play? Is it because you are buying into the Sydney market which is overpriced in many other areas and the Western Sydney area is one place that still has affordable housing and is potentially ready to boom or is it that Sydney is locked in by mountains and ocean with limited building options that are close to infrastructure?

I
 
crunchy said:
Where I am tending to get confused is when I read API and magazines like it or look online I see that the yields and growth for a place like Penrith = 5.0% for 5 yrs and then 3.6% for 10 year with 5.5 rental yield and when I look at Orange for example i see 3.3 for 5 years and then 7.8% for 10yrs with a 6% yield for rent.

I
Click to expand...

Why is this confusing?
 
Hi locko24,

In response to your question, from my way of thinking based purely on stats Orange looks like a good thing and from my visits to Orange and Bathurst I see regional hubs that are developing at a good pace, paying good rents and returning moderate captial growth. There is plenty of development (especially in the north orange area) and some good buys also closer to the CBD.

What I am finding confusing is that then there are those that would say to look in the Sydney basin as returns are better but when I look at the stats they don't appear to back this up.

I noticed that you are based in Orange, do you have any thoughts on this. Do you invest in Orange or have you looked elsewhere.
 
If you did a poll of the somersoftians I doubt that anyone who has bought in either western sydney or orange have such low rental yields. You'll give yourself analysis paralysis if you read stats from magazines.
Spend a few days or as you sound very new to investing, a few weeks reading this forum as there are some very experienced and knowledgeable investors who have posted a lot on your areas of interest. I'm sure that you will then be able to answer these questions yourself and benefit much more as you have learned something along the way.
By the way I have properties both in orange and western sydney. For me it's about the deal rather than the location but was just trying to get you thinking by not limiting yourself to one area and that possibly a better deal could be had closer to home.
 
What she said ;)

I'll add that some people perceive that cities will always out do regional in terms of capital growth. As you've seen with your own dd, this is not always true.

Personally IMO, you couldn't go far wrong buying almost anywhere in the central west.

If you decide on anywhere in the central west, I'm happy to help out.
Good luck
 
Hi Crunchy

I have found prices in Western Sydney have moved quite a bit over the last couple of years with yields now lower than say 2 years ago.

Over this year, I have seen sharper deals with much better yields in SEQ - the Logan and Ipswich areas and am about to close my 4th property there.
Purchase price mid 200,000s for a 7% - 9% yield. Maybe something else to add to your mix.

Friends of ours bought in Orange late last year and paid $350,000 for a 4 bedroom brick and tile 5 y.o. home and get around $400 per week in rent, making it a 5.9% yield ... with those yields, I don't see the point in moving to regionals.
 
Hi Beachgurl, Locko 24 and Cherry Pro,

I appreciate all the advice and thoughts and after talking about it with my wife we've decided to go for the KISS (keep it simple stupid!!) principle and as you mentioned Beachgurl go for the deal and keep our options open.

Locko24 - thanks for the offer and I might just take you up on it.

Cherry Pro - thanks for giving us some different options to look at. Time to go back to Realestate.com.au

Cheers

Crunchy
 
Oh, I forgot to mention, I was getting a > 20% yield during a 'furnished house bonanza' last year, which should be back up and running early next year - fingers crossed. The same place has roughly gone up 30% in the past 18 months with a minor facelift.
 
I have a property settling in West Bathurst ~7% gross yield on PP.

Purchase as I believe to be good steady growth.

Purchased for buy hold, to forget :)
 
Hi Brady,

This is my thoughts as well in regards to an area like the Central West and it appears we have the same thoughts.

Thanks for your advice

Crunchy
 
Also Agree with Brady
I have a property i Bathurst Rent covers mortgage, long term lease , reasonable growth. Rent and Forget, one thing to note is the Charlse Sturt University in Bathurst has just put int an application for a 8 million dollar medical teaching campus at its Bathurst base, whish is a good sign
 
Hi Erko30, Thanks for the heads up about the uni. I've been finding some good properties with good returns that are close to or cover mortgage.

Have you had any problems getting tenants?

Regards

Crunchy
 
I have been looking for an IP in either Orange and Bathurst until recently.

I started discount Orange due to the fact that I heard from Real estate agent (rent manager) that the economy is slowing down.

Also I have realised that there are very good stock of available rental properties in Bathurst and as of Feb 13, vacancy rate seems going up at 2.9%.
This starts giving me concern (in short term).
http://www.sqmresearch.com.au/graph_vacancy.php?postcode=bathurst&t=1
(You need to scroll to the right end of this graph to see the latest figure)

I have researched these areas (checked flood prone areas, past flood history, talked to Town planner at councils, general area information (more and less preferrable areas) from real estate agents etc) and identified the area I want to buy and kept searching until recently.

However, I start realising that rental market is getting hard for IP.
the available rental property
http://www.realestate.com.au/rent/p...athurst,+nsw+2795/list-1?activeSort=list-date

at least there are over 20 NEWLY listed rental property (3 bedder house) available. I can see how hard to find renters in this area if I bought an IP and rent out....

Of course, this is only my view from the fact I found so any other comments all welcome if any.
 
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