High number of rentals in suburbs i'm looking at

[klbt]

I have been looking at buying an investment property in altona, werribee,hoopers crossing or frankston, but when i looked up houses for rent in these areas i got 6 pages full and now i'm worried, if i buy a house and can't rent it out i wouldn't be able to afford paying it myself for too long???

1) what would be the normal wait for tenants
2) and how do people manage during this time with repayments

 

[Bill.L]

Look at different suburbs.

bye

 

[Propertunity]

1) what would be the normal wait for tenants

You can look up vacancy rates here:
http://www.sqmresearch.com.au/
For example Altona's vacancy rate is high atm @ 6.5%. That means your property will be vacant (on average) for about 3.5 weeks out of the year.

2) and how do people manage during this time with repayments

People have to fund the shortfall themselves out of their own pockets. But don't panic too much. If the average rent (and I don't know) was say $300.00, then you have to fund $300 x 3.5 = $1,050 + whatever other negative cash flow you have happeniing on the property.
You have to look at it in perspective though:
Vacancy rates rise and fall during a full RE cycle of 10 years give or take
What's $1K x 10 of vacancy compared with 2x of Capital Gains?

 

[Toni]

Thanks Propertunity for providing that link. Relieved to find Frankstons vacany rate is at 1.4%.

Toni

 

[BoatBoy]

This mornings news

Toyota's Altona plant shut down
Updated: 13:24, Saturday January 17, 2009

Toyota Australia's Altona plant will be shut down for eight days in response to reduced demand in domestic and export markets.

Production of four-cylinder Camry and six-cylinder Aurion models will cease for eight days between March and May 2009, affecting 3,500 employees.

Workers at the plant in Melbourne's west were informed of the plan on Friday.

Toyota Australia corporate services executive director Bernie O'Connor said the shutdown would be managed by use of rostered days off and some annual leave.

'We have developed this schedule in such a way that it minimises the impact on our employees and their pay, maximises flexibility and cost efficiency and minimises impact to customers and suppliers,' Mr O'Connor said in a statement.

'The immediate welfare of our employees remains our prime consideration.

'We have already implemented a number of measures, including slowing the production line, in an effort to address the change in operating conditions,' he added.

Mr O'Connor said export markets had been performing at record levels with more than 100,000 cars exported in 2008, mainly to the Middle East.

http://www.skynews.com.au/finance/article.aspx?id=295737

Older news

Job cuts 'the only solution' for Don

Posted Wed Jul 30, 2008 7:16pm AEST
Updated Thu Jul 31, 2008 7:26am AEST
Don KRC has lost $80 million in the past nine years.

Don KRC has lost $80 million in the past nine years. (ABC TV)

* Map: Altona 3018
* Related Story: Smallgoods company cuts 640 jobs

Small goods manufacturer Don KRC says it has no choice but to cut 640 jobs to keep the company viable.

In Melbourne, 420 jobs will go and 220 will be cut in Perth when the company closes two plants and relocates its manufacturing base to Castlemaine, in central Victoria, over the next two years.

The redundancies will begin in January.

Chief executive Mel Sutton says the loss of $80 million in the past nine years has forced the company's hand.

"In the past few months we've investigated 20 different options to ensure the long-term viability and sustainability of the Don KRC business," he said.

"In the end it became clear that the only solution was to end manufacturing production here at Altona and at the Spearwood Western Australia site and move it to an expanded site in Castlemaine."

Meanwhile, some Western Australian workers at the Don Smallgoods factory in Spearwood say they are not worried about their imminent lay off because of the state's buoyant job market.

"If you are going to lose your job then I suppose this is the best time to do it. I'll just probably go to the mine or something like that I suppose," one worker said.

The meat workers union says it will negotiate further on the pay-outs on offer to staff made redundant.

The union's Graham Bird says many of the employees are aged 50 and over and have been with the company for 30 years,

He says it is important they receive every assistance.

"The current situation under the agreement is three-and-a-half weeks for each year of service capped at 52; they've offered four weeks per year of service capped at 52 so for the large majority here it won't make any difference," he said.

http://www.abc.net.au/news/stories/2008/07/30/2319493.htm

Dave

 

[THEHEATH]

This is just my personal opinion, but I really wouldn't think those things happening would have a major impact on Altona.

 

[sash]

Six pages is not a lot...these are large suburbs and people are always coming and going.

I own in Werribee and Hoppers and so have had minimal vacancies.

I have been looking at buying an investment property in altona, werribee,hoopers crossing or frankston, but when i looked up houses for rent in these areas i got 6 pages full and now i'm worried, if i buy a house and can't rent it out i wouldn't be able to afford paying it myself for too long???

1) what would be the normal wait for tenants
2) and how do people manage during this time with repayments

 

[troyhunt]

1) what would be the normal wait for tenants
2) and how do people manage during this time with repayments

To my mind, the only time vacancies of more than a couple of weeks should occur is when the rental expectation is too high. Even in times and areas of high vacancy I haven't had a problem finding tenants if the price expectation has been reasonable. Do your research, use a good PM, set your prices at a point the market can pay and you'll be alright. My biggest concern about high vacancy rates would be potential for rental growth.