Horsham, Vic.

Discussion in 'Where to Buy' started by JCat, 29th Apr, 2010.

  1. JCat

    JCat Member

    Joined:
    14th Sep, 2009
    Messages:
    38
    Location:
    Geelong, Vic
    Whats peoples thoughts on an IP in Horsham Vic?
    Population around 14000, main industries seem to be related to farming and hospital and schools.
    Anybody have any info on upcoming projects or major bussiness plans for Horsham?
    Any idea on vacancy rate?
    Some very affordable homes with good returns.





    Sorry for all the questions..


    Cheers Jas.
     
  2. our obsession

    our obsession Amor est vitae essentia

    Joined:
    8th Apr, 2005
    Messages:
    3,384
    Media:
    234
    Location:
    Home sweet home...
    -------------------------------------------
     
  3. JCat

    JCat Member

    Joined:
    14th Sep, 2009
    Messages:
    38
    Location:
    Geelong, Vic
    Thanks for the reply..very interesting.

    After doing a search, i've noticed in one of your posts CG figures for regional cities in vic between 97-07.
    Horsham was one of the lowest performers. Whats your thoughts on that?
    Is it that Horsham will catch up, or already has?
    RP data shows Horsham has increased by about 15% so far this year? Is that how it reads?

    Cheers Jas.
     
  4. Gentle_Chief

    Gentle_Chief Positive Cashflow

    Joined:
    30th Oct, 2007
    Messages:
    282
    Media:
    13
    Location:
    Sydney, Australia
    I was looking at Horsham (and still am). Relatively inexpensive entry point.
    However, be wary of older houses in Industrial zoning....

    P.S: Industrial Zones in Horsham have a much lower re-sale value, not much takers maybe....
     
  5. our obsession

    our obsession Amor est vitae essentia

    Joined:
    8th Apr, 2005
    Messages:
    3,384
    Media:
    234
    Location:
    Home sweet home...
    Relatively L-O-N-G P-O-S-T :)

    That was median house prices, over the decade, with an average of growth, for the decade.

    I don't base my investing upon those statistics, I have learnt to "look at the deal"....buying well, good overall research...and weigh up the deal.

    ...and:

    And...a thread on:

    Median values don't reflect the real world (KeithJ)

    http://www.somersoft.com/forums/showthread.php?t=61268

    Excerpt...and it's another interesting read

    Jcat, I have something I can email you, I think you may find it (also) interesting and perhaps more rounded with it's info, PM me if you want. Unfortunately I'm not able to post it here..:(
     
  6. Kristine..

    Kristine.. Broker and Raconteur

    Joined:
    1st Mar, 2001
    Messages:
    3,047
    Location:
    Melbourne, Victoria
    Ah! Horsham!

    One of my very favourite places and occupies a special place in my heart!

    My very very very first mortgage customer (thanks, Simon!) was in Horsham (still is!). He bought #76 and recently other customers of mine bought #78 – this got rented to the Daughter of #82 while they were still working on it!

    I think that since 2003 there has not been a time when I have not been working on a deal in Horsham. At one time last year I had four construction loans in the same court, and all with different lenders. Never had any problem getting finance for buyers and the buyers have never had any problem getting tenants

    In my experience over the past seven years the increase in rent return has been significant and the increase in prices / values has been considerable.

    For example #76 was bought for $68,000 in 2003. #78 was bought for $118,000 in 2009. #78 rents for $175 per week.

    On a capital basis, the two adjacent properties are very similar being ex-Housing Commission cement sheet & tile three bedroom family homes.

    In a straight line, the capital growth is 75% over 6 years, not bad at all for an area which appears to have had no growth.

    #78 is achieving a 7.7% gross yield. This just about covers interest and outgoings and considering that my purchasers have no money in the deal (borrowed $126,000 including equity from another property) then leaving aside the tax benefits, gross rent of $9,100 per annum less interest expense on $126,000 @ 6.41% = $8,076 per annum – so the property will be costing them slightly under the Rates, Insurance and Property Management costs to hold.

    Since buying #78, my customers have also bought #9 and #11 in another street. They have gone from nought to $42,000 per annum rental income. For three purchases totalling $563,000 they could not have bought one property in their home area in Melbourne and if they could, they would be achieving about $25,000 per annum rent.

    As Our Obsession said, it is all in the deal. No point in buying in a low growth area if the rent return is also low. A Golden Rule is ‘show me the cash flow’ and this comes down to choosing the property well, structuring the finance properly, and making sure that the property can achieve it’s optimal rent.

    If the property is a bit tired, it is worth having a professional cleaner go through, maybe a coat of paint, attending to any maintenance items particularly making sure that all appliances are working properly, and having the garden spruced up to enhance street appeal.

    There is no such thing as a free lunch and there is no such thing as a Great Deal in Horsham, or anywhere else, without putting the work into the deal and probably, into the property as well to make sure it is as well presented as possible and exceeds market expectations.

    Market expectations for rental properties, in many areas, is quite low. If you can present the property above the ‘mean average expectation’ for the area then you will be rewarded with a higher rent, a more satisfied tenant, and a better investment.

    Horsham has ridden out economic downturns, droughts and the changing expectations of property owners and tenants.

    It is a very stable economy and is there for the long haul.

    Jcat, being in Geelong you have a head start on getting to know Horsham and perhaps spending some time there or allowing a weekend or two to spruce up your new purchases.

    They tell me the steaks at the Commercial Hotel are the best in the Southern Hemisphere, an added bonus!

    You could certainly do a lot worse than to invest, or to live, in Horsham.

    Cheers
    Kristine
     
  7. JT7

    JT7 Member

    Joined:
    19th Jul, 2010
    Messages:
    355
    Location:
    Hornsby Shire, Sydney.
    Hi everyone...I'm new to the forum and have been looking at Horsham. You all have provided some great commentary in relation to Horsham and the support systems this forum creates and encourages is truly fantastic. It's a great community of like minded people.

    Horsham West appears interesting and I've heard that there are homes being removed in this area and people are developing the land into townhouses. Has anyone got any experience or thoughts about Horsham West and in particular future development in the area? And...the general attitude of the local council regarding such development...are they progressive?

    Cheers, Jack
     
  8. our obsession

    our obsession Amor est vitae essentia

    Joined:
    8th Apr, 2005
    Messages:
    3,384
    Media:
    234
    Location:
    Home sweet home...
    Just in regards to Horsham:

    From here:

    http://www.hrcc.vic.gov.au/index.ph...atid=44:general-council-information&Itemid=21

    The 2040 Plan itself is just a download click to your right of screen on that link.
     
  9. Gentle_Chief

    Gentle_Chief Positive Cashflow

    Joined:
    30th Oct, 2007
    Messages:
    282
    Media:
    13
    Location:
    Sydney, Australia
    There is a problem with higher than normal vacancy rates at the moment.
     
  10. Kristine..

    Kristine.. Broker and Raconteur

    Joined:
    1st Mar, 2001
    Messages:
    3,047
    Location:
    Melbourne, Victoria
    As in any area, it is the better presented properties which will attract the tenants
     
  11. our obsession

    our obsession Amor est vitae essentia

    Joined:
    8th Apr, 2005
    Messages:
    3,384
    Media:
    234
    Location:
    Home sweet home...
    Is there?

    Only been investing in Wimmera 4.5 years, but had no difficulties renting out (resi only), mixture of, (well presented), older and newies. A friend who has many more resi and commercial IP's has been investing 20 years there and never had delays in renting, he has mixture of (in resi portfolio) units and houses, I'm only houses as yet.

    My last rental was couple of months ago, could have filled 5 more IP's with applications, (working on that:)) friend is (currently) filling units and a house, no shortage of applicants.

    Are you having troubles personally with finding tenants? I'm interested to hear more.
     
  12. bennido

    bennido Member

    Joined:
    27th Sep, 2007
    Messages:
    134
    Location:
    MEL, VIC
  13. JT7

    JT7 Member

    Joined:
    19th Jul, 2010
    Messages:
    355
    Location:
    Hornsby Shire, Sydney.
    I've recently been in contact with one of the real estate agents in Horsham who has been helpful in giving me his opinions on the market...(taken with a pinch of salt of course). I asked him about the vacancy rates and he seems to corroborate OO and I quote....'With vacancy rates we only have 4 properties available and we manage about 220. It all depends on price as well to how long they stay on the market for but generally they get leased quickly.'...with active investors with real on the ground knowledge sharing their experiences on this thread together with professionals in property management all backed up with favourable statistics it appears Horsham's rental market is generating healthy yields and will continue to do so.