Inspection

[Tranquilo]

Hi Guys my first time in buying an investment property.
I'm from Sydney and the last couple of weeks have travelled down to Geelong way to buy an investment property but didn't find what I was looking for. Originally I was looking at older houses with big blocks but now looking at newer 2-3 town houses because of depreciation. Ok anyway to save me to travel down there again I want to use a building inspector to do my inspection and if OK buy the house that way, or would you recommend to go through the house yourself before to buy.

Thanks for any info

 

[thatbum]

Hi Guys my first time in buying an investment property.
I'm from Sydney and the last couple of weeks have travelled down to Geelong way to buy an investment property but didn't find what I was looking for. Originally I was looking at older houses with big blocks but now looking at newer 2-3 town houses because of depreciation. Ok anyway to save me to travel down there again I want to use a building inspector to do my inspection and if OK buy the house that way, or would you recommend to go through the house yourself before to buy.

Thanks for any info

I don't think I'd trust someone else to make it call if I was buying for the first time.

But I guess I also wouldn't be buying in another state for my first IP either. Or buying for depreciation.

What's your strategy with this purchase?

 

[Roachy]

Hey Tranqulio,

Not being a Geelong buff but isn't the entire region in or is going to be in a massive downturn due to manufacturing, especially with the car industry coming to a halt?

If you are keen to buy down that way maybe leave it a couple of years.

 

[Tranquilo]

I was looking here first but my budget doesn't allow me to buy here in Sydney.
I'm originally from Geelong so I thought I would try down there. I have 2 areas down there for capital growth but this travelling down there each weekend is a bit much. Why Geelong because it is still affordable at the moment and I'm in for the long term and try to start somewhere to build a portfolio.

I'm already approved for finance just keen to get going.

 

[Tranquilo]

Hey Tranqulio,

Not being a Geelong buff but isn't the entire region in or is going to be in a massive downturn due to manufacturing, especially with the car industry coming to a halt?

If you are keen to buy down that way maybe leave it a couple of years.

I know a lot of manufacturing will be going but im sure the whole of Geelong would bounce back. I would be buying for long term. Anyway sounding silly or not that's why I decided to post here because you guys know what you are talking about

 

[Bantam Roosta]

If your only reasons for buying in Geelong are that you are from there and you think it will bounce back I would probably take a step back and think about what you are trying to achieve, other than just for the sake of starting to build a portfolio.

Geelong may be a fine location to invest (I have absolutely no idea about the region), however it doesn't sound like you've done enough research to actually make that decision for yourself yet.

BR

 

[Tranquilo]

Thanks BR. You are right I do need some more research. I only was looking to Geelong because of my budget.

If anyone could suggest an area for the $350,000. I know not much to play with.

 

[impala67]

Thanks BR. You are right I do need some more research. I only was looking to Geelong because of my budget.

If anyone could suggest an area for the $350,000. I know not much to play with.

There are many others that don't have $350K budget. So it's a good start. If you are looking at alternatives apart from just Geelong, maybe look back to Melbourne.

If it's just a budget thing then maybe consider inner Western Melbourne, older stock, with a view to renovations to add value. Especially since it's long term hold as you mentioned. Or, outer Eastern Melbourne & SE Melbourne near infrastructure. Also, Adelaide is in your budget, as are many regional large cities. All the best.

 

[alicudi]

Hi

I believe that Geelong is a fantastic area to own real estate. I also think it is going to be a very good time to buy in that area towards the end of 2015 and 2016 as I think prices in that area are about to come tumbling down. I would think if someone were to buy in that area at that point in time it should realise some very good capital growth.

However it may not be that easy to find a tenant if a lot of people are forced to leave the area due to lack of employment opportunities.

Best of luck in where you decide to invest. With a budget of $350,000 you have lots of choices.

Regards,

alicudi

 

[Wirra436]

Some Places in Regional NSW that I believe are good choices.
Diversed Industries, Good Yield and Reasonable Growth.
Take a road-trip from Sydney and maybe check some out.

 

[Tranquilo]

Thanks for everyone's advice and PM's.

I've been looking at one site and they say maybe Berwick or Frankston Victoria might be a good place they are in my budget. I want a house the first time for my IP don't like the idea of strata cost associated with apartments.

 

[alicudi]

Hi

To Tranquilo: you are taking my ideas right out of my mind. The three areas you have mentioned (Geelong/Frankston/Berwick) are the three areas I would like to own investment properties in.

In my opinion:

Geelong values are due to come crumbling down and that will be the right time to buy. But how will the tenants be able to pay the rent if their is a huge lack of jobs in Geelong? Will Geelong follow the path of Detroit (USA)??

Frankston has scope for higher than normal capital gains but your tenant could be very problematic. Frankston is never short of tenants, the problem is trying to find and keep a good one that pays on time and wont trash your property.

Berwick I believe is a good place to buy an ip and will be easier to secure a good tenant say when compared to Frankston and probably Geelong as well, but I think its capital gain wont be as high as Frankston's will be due to Frankston's proximity to the beach and Mornington Peninsula.

So if you want to buy now look at Frankston to take advantage of long term capital gain, then look to buy in Geelong when the prices should be lower in 18 months or so and then like me and others it becomes to late to buy in Berwick as you feel like you get priced out of the market!

But please don't take my word as gospel as I am not an expert or financial planner. I also think that Berwick is the safest option of the three areas to buy an ip in (class Berwick as a Blue Chip share versus Frankston as a speculative share and Geelong as a share that is about to drop a lot of value).

I would love any other input from the somersoft guru's that may be able to confirm my thoughts or in fact tell me I am on the wrong track and that I am thinking about all of this the wrong way.

Regards,

alicudi

 

[WattleIdo]

I agree with your line of thinking and suggestions made by alicudi and impala67.

Most important from my pov is: you just need to make sure you can cover the shortfall when investing in Melbourne because the yields are quite low - your ip will probably be negatively geared for several years no matter how much depreciation or value-adding you do.

I also think it's a good time to be looking in Geelong. I seem to remember hearing that the govt intends to look after the factory workers there - and it's still a few years off before closures and they're skilled workers so I don't think it's going to be all that bad. Maybe now is the right time.

The Melbournians still don't seem to get that anything in the inner-city is a good investment - so there are some undervalued suburbs around closer to the city, that's for sure.

The central west in NSW has ok yields but who knows where it's going with CG - I agree with you that Melbourne is the go.

As far as looking at properties, inspections, etc, I would continue to do the hard yards. Of course you can't do it every weekend but maybe once a fortnight or once a month. It will be a good motivator to be decisive. You might meet someone who could be helpful. Maybe you could take a week off work?

I bought site unseen and don't recommend it. It's ok but it's not optimal. And you need optimal.

Definitely no expert but on a similar trajectory to you.
Good luck
wattle

 

[Tranquilo]

Hi

To Tranquilo: you are taking my ideas right out of my mind. The three areas you have mentioned (Geelong/Frankston/Berwick) are the three areas I would like to own investment properties in.

alicudi

Great at least I'm starting to look in the right places. Looks like I'm off to Berwick this weekend lol. Again I really appreciate your input thanks heaps.

 

[Tranquilo]

Thanks WattleIdo. Yes I can cover any short falls and also if the property wasn't rented for awhile.

Yes I agree I'll do all the inspection myself and then get a building inspector to check out the building.

When I was in Geelong the last couple of weeks in a suburb called Hamlyn heights there is a lot of rebuilds happening and subdivision going on. I thought if I buy one of these houses with big blocks 650sqm with more other subdividing my block would increase in value.

 

[alicudi]

Great at least I'm starting to look in the right places. Looks like I'm off to Berwick this weekend lol. Again I really appreciate your input thanks heaps.

Or we are both looking at the wrong places!

Regards,

alicudi

 

[Tranquilo]

Well looking at realesate.com.au there is 309 properties for rent and high rent demand in Berwick. For almost 45,000 people for the area and more than 50%of them are married couples maybe some with children that's a lot of properties. Can you trust the figures in realesate.com.au

 

[R377]

As most ppl have said in Vic. Western suburbs or down towards Frankston Dandenong way.

While most states have had their run of growth SA Adelaide has been flat for the past few years so would be a good time to get in there.

 

[Tranquilo]

Thanks R377. Yeah Dandenong does look affordable and with a 6.49 growth pa over the 5yrs. What growth should we be hoping for realistic pa?.
My areas of Geelong I was looking has the same growth the last 5yrs.

Ok I have Berwick, Dandenong or maybe still Geelong and hope its not all doom and gloom.

I did actually make an offer on a house in Geelong last Wednesday $13000 under what there asking minimum price. The agent tried to call me back today but I missed the call. I'll give him a ring tomorrow just to see how keen they to sell or not.