Dimboola Flats revisited

[Kristine..]

G'Day

Rob Phillips of Horsham Real Estate has kindly advised me that these flats

http://www.realestate.com.au/cgi-bi...f=10&p=10&t=res&ty=&snf=&ag=&cu=&fmt=&header=

are back on the market.

These were previously discussed about eighteen months ago

http://www.somersoft.com/forums/showthread.php?t=15874&highlight=dimboola


Rob says that rentals are currently
quote<<
Flat 1. $65 per week
Flat 2. $60 per week
Flat 3. $80 per week
Flat 4. vacant, asking $80 per week
Flat 5. $80 per week.
So the potential return is just under $19,000 per annum, with a possibility of increasing the lower priced units. unquote >>


In the same manner of discussing the one bedroom flat at Sale in Victoria, and Peter's example of 2 units for $80,000 at Jerramungup in Western Australia, this block of ex-Education Department flats at Dimboola in Western Victoria may be worth a post or two.

For any technical questions please ask Rob, but for general discussion of this type of 'high yield' investment away we go!

Cheers

Kristine

 

[Peter Parker]

G'Day

Rob Phillips of Horsham Real Estate has kindly advised me that these flats

http://www.realestate.com.au/cgi-bi...f=10&p=10&t=res&ty=&snf=&ag=&cu=&fmt=&header=

are back on the market.

Kristine, funny you should mention this as I had saved this in my 'Favourites' as one to watch just yesterday.

I reached for my country street directory and Dimboola wasn't there - a bad sign. The demography and risks would be similar to Jerramungup, though Dimboola has more people (between 1500 and 2000) and is less remote.

Unlike Jerramungup, it is within commuting distance (35km) of the much larger Horsham. The demographics are terrible, with both the population and the number of households predicted to drop. However there should be more people aged over 65 than there are now so this may point to an opportunity.

This was one of the many results when searching for 'Dimboola Population Decline'.

http://66.102.7.104/search?q=cache:...Regions.doc+dimboola+population+decline&hl=en

paints a gloomy picture, with this sentence being the most important:

Many of the Wimmera shires report no growth in the small towns, with vacant residential lots and need for industry. Growth is expected in larger centres and low levels of investment for declining areas.

On the other hand, using the rule of 72, if an area is dropping by 1% pa then its population should halve in 72 years. This is longer than most peoples investment horizon and there may still be opportunities. Besides towns like Moe and Morwell have declining populations but still experienced the real estate boom like everywhere else.

Dimboola however has a (very small) hospital. A detailed look at health in the area is here: http://www.phcris.org.au/cgi-bin/sod/browsepr.pl?div=330&bp=6&ar= There appears to be only one doctor in town.

I did a quick search of apartment blocks in towns in other states. It remains the case that you can obtain a higher yield from a similar property in a bigger town in Qld or WA than you could in Vic. If town size is regarded as inversely proportional to risk, then this has implications for investment security. On the other hand remote investing and not being able to do some tasks oneself has a whole set of other costs and risks.

To demonstrate that there are some good deals around, recently I came across an ad for a 6 unit block in Geraldton (5x1br + 1x2br). Sale price was $220k and rental income estimated at approx $400pw. The place could do with a spruce-up but if done so, the rent could have been at least $500pw. It was in a handy location. Provided the building was OK and not too much work was needed could have made a first-rate investment. Unfortunately (or fortunately) it sold

Rgds, Peter