Inner vs Outer suburbs and Yardney's newsletter

[Peter Parker]

Wakelin's on fire today, with some real radio-bashing moments this morning

Some choice quotes:

* 'investment' and 'outer suburbs' are like olive oil in coffee - they do not mix

* Outer suburban property prices grow by inflation or slightly less (as opposed to inner suburbs)

* Investment property must grow at least 5 to 7% over inflation for it to be worthwhile - otherwise you're just treading water

* Point Cook vs Altona Meadows? Point Cook - it's closer in.

When challenged (Altona Meadows is actually closer in):

* I'd still go Point Cook - Altona Meadows is too industrial, Point Cook is more rural

A laugh a minute from one who claims to be expert!

 

[our obsession]

Olive oil on a bit of my pane de casa with my expresso coffee is....beautiful.

Her segment on the show has been going years now, I just hope people have the sense to do their own due diligence re/ property investing. I think they do, where the desire and determination is great enough, the inners and outers, the metro vs regionals, the blue ribbon vs brown string....hmmm, maybe I should ring in.

 

[sash]

Hmmmm....property experts (aka spruikers)...you gotta love them.....

Though give them credit...given the number of suckers who end of buying stuff off them.....but will never buy another property for years because of the negative CF in he inner suburbs.

Wakelin's on fire today, with some real radio-bashing moments this morning

Some choice quotes:

* 'investment' and 'outer suburbs' are like olive oil in coffee - they do not mix

* Outer suburban property prices grow by inflation or slightly less (as opposed to inner suburbs)

* Investment property must grow at least 5 to 7% over inflation for it to be worthwhile - otherwise you're just treading water

* Point Cook vs Altona Meadows? Point Cook - it's closer in.

When challenged (Altona Meadows is actually closer in):

* I'd still go Point Cook - Altona Meadows is too industrial, Point Cook is more rural

A laugh a minute from one who claims to be expert!

 

[BayView]

Yeah, I am starting to think that this is the way to go for me. To buy either in the outer suburbs of Perth such as Orelia (32 K from Perth), or even further out like Rockingham (40 Km from Perth) or Mandurah (65 Km from Perth). I can buy a house for around $250 K on a big block. Perhaps later on sub-divide. I can get more for my dollar

When starting out, this is a great mindset to take on. Low entry level, can add value and make a good % return.

Later on, as the zero's increase on the end, you can look closer in and do a similar to this with bigger (dollar) returns. The % might decrease, but the money in your pocket increases.

For example; you might buy a $1mill house in Brighton that is a dog. Spend about $250k on it for a good reno. Add another 5% for purchase costs = $1.3mill total outlay. A bit simplistic, but you see where I'm goin'.

Sell for $1.8mill. Return on investment is $500k - 38%. Not bad. And - it has been done.

Or, sell for $1.5mill nett. ROI is only $200k - 15.3% which is not too good, but geez; $200k in yer pocket wins me.

 

[chilliblue]

What about all the immigrants coming into Australia, where do you think they are going to buy their first piece of our great country? Certainly not Artarmon (inner north sydney)!!


.

Had a good laugh at this as that is exactly where we moved to when we first arrived.

 

[buzzlightyear]

Wakelin's on fire today, with some real radio-bashing moments this morning

Some choice quotes:

* 'investment' and 'outer suburbs' are like olive oil in coffee - they do not mix

* Outer suburban property prices grow by inflation or slightly less (as opposed to inner suburbs)

* Investment property must grow at least 5 to 7% over inflation for it to be worthwhile - otherwise you're just treading water

* Point Cook vs Altona Meadows? Point Cook - it's closer in.

When challenged (Altona Meadows is actually closer in):

* I'd still go Point Cook - Altona Meadows is too industrial, Point Cook is more rural

A laugh a minute from one who claims to be expert!

Well, she's always been consistent with the message at least. I am always confused about this inner versus outer debate. What is deemed as inner and where is the cutoff for what suburbs are described as outer. Is it simply a km radius from the city, or do you deem this to be certain styles of housing found in the suburb eg anything earlier and including Art Decos is inner suburb? Is outer suburbs 60's and 70's built homes?

Been to PC quite a few times, and I can't honestly assess that as inner suburb

By the way, Altona Meadows is closer to the sewerage plant, so maybe Wakelin can be excused on the preference to PC over AM (?)

 

[Peter Parker]

Well, she's always been consistent with the message at least. I am always confused about this inner versus outer debate. What is deemed as inner and where is the cutoff for what suburbs are described as outer. Is it simply a km radius from the city, or do you deem this to be certain styles of housing found in the suburb eg anything earlier and including Art Decos is inner suburb? Is outer suburbs 60's and 70's built homes?

Been to PC quite a few times, and I can't honestly assess that as inner suburb

To be fair to her, she was merely expressing a preference for Pt Cook over Altona Meadows - she would never recommend either area for an investment.

It would be interesting to compare the % investors for both suburbs (a new suburb full of 'Investment Club' off-the-plan specials risks vacancy issues).

On the first question she sometimes quotes a distance (eg 8 - 10km from CBD) but she also recommends Art Deco and anything with scarcity value, even if it means paying extra and/or only getting a 1 bedder. Failing that a '60s unit in a small complex with own parking in good inner area (with a yield of probably 4% or less) would be OK.

There's prewar stuff in Ringwood or Frankston, but they don't meet her distance rules, so they're no good (another assumption she makes is that everyone works in the city).

 

[jingo]

A Wakelin Special

After reading much of Monique (a)sasson Wakelin's material for many years and attending one of her free portfolio reviews, I rekon this is the type of investment that would satisfy most of her investment criteria.

http://www.realestate.com.au/property-apartment-vic-elwood-107159695

It is a spacious two bedroom flat in a block of 16. Located on the first floor at the back of the block and has an under cover carport on title. Walking distance to St Kilda Botanical Gardens, Acland Street, and tram on Brighton road. It sold at auction on the weekend for $541,000.

Based on an interest rate of 7.5% and 105% lend it would cost $42,603 in interest p/a. Less annual rent of $21,840 ($420 per week). Shortfall would be $20,763 p/a. This doesn't allow for the outgoings (Agent fees, body corporate fees, water, rates etc).

For anyone who is interested, the Wakelins are holding a forum (cost of $70) on 22 March with real life case studies. Here is the link.

http://wakelin.com.au/property_investment_forum

As for Altona Meadows - It is located about 1km away from Altona. Has achieved 10% growth p/a for the last 10 or so years. Is sought after by both owner occupiers, investors and renters due to its proximity to the city via freeway and the Laverton Railway station (Zone 1).

By the by, Altona Meadows has much better access in and out of the suburb than Point Cook.

Spiderman, I am a little puzzled about your reference to the industrial nature of the suburb? There is no industry in Altona Meadows at all. Are you thinking of Laverton North?

Regards Jason.

 

[Melbournian]

After reading much of Monique (a)sasson Wakelin's material for many years and attending one of her free portfolio reviews, I rekon this is the type of investment that would satisfy most of her investment criteria.

http://www.realestate.com.au/property-apartment-vic-elwood-107159695

It is a spacious two bedroom flat in a block of 16. Located on the first floor at the back of the block and has an under cover carport on title. Walking distance to St Kilda Botanical Gardens, Acland Street, and tram on Brighton road. It sold at auction on the weekend for $541,000.

Based on an interest rate of 7.5% and 105% lend it would cost $42,603 in interest p/a. Less annual rent of $21,840 ($420 per week). Shortfall would be $20,763 p/a. This doesn't allow for the outgoings (Agent fees, body corporate fees, water, rates etc).

For anyone who is interested, the Wakelins are holding a forum (cost of $70) on 22 March with real life case studies. Here is the link.

http://wakelin.com.au/property_investment_forum

As for Altona Meadows - It is located about 1km away from Altona. Has achieved 10% growth p/a for the last 10 or so years. Is sought after by both owner occupiers, investors and renters due to its proximity to the city via freeway and the Laverton Railway station (Zone 1).

By the by, Altona Meadows has much better access in and out of the suburb than Point Cook.

Spiderman, I am a little puzzled about your reference to the industrial nature of the suburb? There is no industry in Altona Meadows at all. Are you thinking of Laverton North?

Regards Jason.

how about crime rate in altona, altona meadows?

 

[Peter Parker]

Spiderman, I am a little puzzled about your reference to the industrial nature of the suburb? There is no industry in Altona Meadows at all. Are you thinking of Laverton North?

Jason - she said that, not me. I was also puzzled.

I thought she was confusing it with Altona North near the refinery.

It's outer and it's west, so it must be doubly no good. Further research or geographical accuracy not required. No correspondence entered into!

 

[jingo]

how about crime rate in altona, altona meadows?

I found this relating to the crime rate in Hobson's Bay - which incorporates the suburbs of Williamstown, Newport, Altona, Altona Meadows and Laverton.

http://www.vicpolicenews.com.au/index.php?option=com_statistics&task=view&id=19&postcode=3028

I did a quick comparison with the city of Port Phillip - an area that the Wakelins advocate which covers Elwood and St Kilda. Enter the post code 3184 for this area into the search below.

http://vicpolicenews.com.au/index.php?option=com_statistics&task=search


On face value, there appears to be higher crime in these areas than in Hobsons Bay.

Regards Jason.

 

[jingo]

Jason - she said that, not me. I was also puzzled.

I thought she was confusing it with Altona North near the refinery.

It's outer and it's west, so it must be doubly no good. Further research or geographical accuracy not required. No correspondence entered into!

Hi Spiderman,

Thanks for the clarification - it sounded like something Wakelin would say and not yourself! Yes, she is completely wrong on that account (and numerous others).

Altona is technically a middle ring suburb - but as you mention, anything past Elwood is an outer suburb in Wakelin's book. I note that the Wakelins discount anything in the West at all, including places like Yarraville - which incidently has shown amazingly high growth over recent years.

There is one advantage in having such a narrow investment view - research is restricted to a contained geographical area. The Wakelins certainly use this aspect to their full advantage when sourcing property for their clients.

Regards Jason.

 

[Ms Jade]

As for Altona Meadows - It is located about 1km away from Altona. Has achieved 10% growth p/a for the last 10 or so years. Is sought after by both owner occupiers, investors and renters due to its proximity to the city via freeway and the Laverton Railway station (Zone 1).

By the by, Altona Meadows has much better access in and out of the suburb than Point Cook.

ITA. I am very pro Altona Meadows in the medium term. It's pretty close to town for the $, and prices will be pushed up as people pay ever more to extend ever westwards.

 

[Peter Parker]

Altona is technically a middle ring suburb - but as you mention, anything past Elwood is an outer suburb in Wakelin's book. I note that the Wakelins discount anything in the West at all, including places like Yarraville - which incidently has shown amazingly high growth over recent years.

That's interesting - I thought places like Yarraville and parts of Footscray were OK in her book.

Although I can see how the proximity to industry (especially Yarraville) and the concentration of roads and railways carrying freight and passenger traffic in the West would offend her sensibilities.

 

[our obsession]

I get that about the Wakelin's, meaning they cater to a 'special class'-it just drives home (to me again), how much I love the Jan Somers approach? of building wealth, story by story. Anyone can do it. If you have the desire, or fall into investing by proxy, the point is it can be done and done a multitude of ways, by a multitude of people in a multitude of areas...

I love the characters in my world of simple country living that are financially independent, wealthy people that have built that independence and wealth from their environment and opportunity, and hard work too of course. There is (great) wealth to be made and created from regional victoria Monique.

There are many ways to invest and build wealth.

 

[Peter Parker]

There is (great) wealth to be made and created from regional victoria Monique.

Though when pressed she'll admit that a period miners cottage in inner Bendigo or Ballarat is OK if you can't afford the $400k for a 1br inner Melbourne apartment.

 

[jingo]

I get that about the Wakelin's, meaning they cater to a 'special class'-it just drives home (to me again), how much I love the Jan Somers approach? of building wealth, story by story. Anyone can do it. If you have the desire, or fall into investing by proxy, the point is it can be done and done a multitude of ways, by a multitude of people in a multitude of areas...

I love the characters in my world of simple country living that are financially independent, wealthy people that have built that independence and wealth from their environment and opportunity, and hard work too of course. There is (great) wealth to be made and created from regional victoria Monique.

There are many ways to invest and build wealth.

Well said, my obsession. Jan's approach is certainly a lot more objective and demonstrates the many ways available to reach financial freedom through property. Jan's method certainly proves that it is possible to build up a portfolio in outer suburbs and regional areas.

My main gripe with the Wakelins is their insistence that their way of investing is the only way. I wonder how many people have sold down parts of their portfolio as a result of her portfolio reviews - or worse still, not invested because they couldn't afford the minimum entry price that the Wakelins advocate......

 

[jingo]

That's interesting - I thought places like Yarraville and parts of Footscray were OK in her book.

Although I can see how the proximity to industry (especially Yarraville) and the concentration of roads and railways carrying freight and passenger traffic in the West would offend her sensibilities.

Perhaps she has changed her tune in very recent times due to the undeniable evidence of a huge rise in prices in these areas. She certainly turned up her nose at the prospect when I went to see her a number of years ago. So did Paul Nugent. (Not sure if he still works with them or not)....



Regards Jason.

 

[rchad]

Thank you for your excellent post - I agree very much with you - Michael Yardney's vested interest is to sell inner city properties in capital cities that are older hence he can 'help' you via selling his buyer agent services to purchase followed by a 'renovation package' that Metropole specialises in; there is nothing wrong with selling a product however when one's vested interest is disguised within 'factual research' it detracts from objective, reliable, statistically valid and robust research

 

[Michael Yardney]

Thank you for your excellent post - I agree very much with you - Michael Yardney's vested interest is to sell inner city properties in capital cities that are older hence he can 'help' you via selling his buyer agent services to purchase followed by a 'renovation package' that Metropole specialises in; there is nothing wrong with selling a product however when one's vested interest is disguised within 'factual research' it detracts from objective, reliable, statistically valid and robust research

There has been some great discussion on this topic and as my name has been mentioned a few time, I'd like to clarify a few things.

*We do not sell properties
* I have always understood that there are many ways of investing, (including CF+) and what suits one person does not necessarily suit another
I've clearly stated this in my books, at my seminars and in my model of the different levels of investors
* I have always found successful investors specialise in one thing or area or niche and repeat it over and over again (one of Warren Buffet's fundamental principles) That's the way to become an expert, doing one thing 100 times, rather than one hundred things once.
* I have found a niche that works very well for me and have now specialized in it for many years.

Keep up the great debate!