Is My Plan Unrealistic?

For me, I would feel more comfortable starting my IP journey with low priced properties like you have listed. My only concern with them is, how will the go in the future? Being located usually in small country towns outside the city, how do you determine the risk with these properties?

I had a look at some towns near Mudgee in NSW. Mudgee seems to be the central of these surrounding suburbs, and it has railway access and also an airport! Prices around the edges of the suburbs are around the 100k mark for something that needs renovation.

Thanks for the information listed RE.
 
I'm tipping our local area to be the next big regional boom town in SA - it has all the hallmarks. But not a 'huge' boom per se, just doubling or tripling in size in the next few years, which just happens to be the council plan for the area. There's absolutely millions being spent on new Stuff. You can call me out on that in a few years if it doesn't go that way. Been watching it grow from a distance since 2003 and moved here this year.

All the other towns I mentioned houses in are just so-so, meandering along, don't expect much in the way of CG. People with money or snobby aspirations are selling up out of a lot of the smaller towns and moving here, while anyone without aspirations is cashing out of here and moving to cheaper towns. I'm doing both - I'm cashing out somewhere cheaper for a few months to build, then coming back :D
 
i have been thinking about investing in a regional town like geraldton for instance, units around $150 K.

i wouldn't be too worried about cg, because i think cg would be ok, the thing i get worried about is leasing the unit.

What kind of leasing arrangement ie would it attract only short term leases, and if so it might mean i'd have to furnish it. i dont know if i'd want the hassle of furnishing. I wouldn't want to have too many vacancies. This could be a risk of investing in a region ?

?
 
I'd say the biggest problem with the regionals is advertising. If the PM isn't local, they'll probably just whack the for rent ads on the internet. The local PM (local being over 100km away and much closer to the city) said houses in my old town take a really long time to rent out because they've had one listed for 6 MONTHS. I'd never seen an ad for it, anywhere. Turns out they only advertised it online, gawd knows which website.

I stuck a few bits of paper on the local community noticeboards around neighbouring towns and got quite a few queries out of that, and the eventual tenant. And none from an ad I put on the internet. That's how I'd advertise in the future if I needed to.

Funny thing is we looked at a house last week and I got the same spiel from the agent about selling houses, and he also said you needed more than the internet. He's right. Internet penetration in the regionals is surprisingly low. He also charges considerably less than the last agent I used so I think he gets the listing :)
 
I can definitely see the benefit for you to invest in regional towns. Living in the town your investing is also a major upside, any town that has property for around the 150k mark is around 3 hours away from where I live. For our first IP, I don't really want to invest in an area that far away.

Aslong as where we invest is in our means, has a half decent CG and Good rental yeild...I'll be a happy chap!
 
Some relatively good news, our tenants are moving out of our IP and we are moving in this month. We would have liked them to stay in until March but we have no issues with this, I was getting sick of living with the partners parents!!

So we have been busy organising and saving money to get much needed renovations done to spruce the place up! So far the current plans are:
* Polished Floorboards
* Re-paint
* Install new Gas Stove
* Install new fences
* Turn the yard into an easy maintenance (few plants)
* House Rewire (1950's wiring)
* Clean Roof
* Repaint Kitchen Cupboards & Replace Benchtop (or relaminate)

....and I'm sure there are a few more things that will need doing. Currently we are budgeting around the 10k mark as we are able to do all the work except the wiring and floor boards. We have scouted the area and are finding similar 'spruced up' places are renting for around the $360 mark, sometimes more. We aim to rent it back out late 2010 or early 2011 for minimum $360 - at which point we move out and rent to focus on 2nd IP!

On other good news aswell, I have done a spreadsheet to calculate our bad personal debt to see how much we have wiped off. In April it sat at $40,000 and as of today it sits at $23,172.01! So stoked that we have nearly paid out half that loan in 8 months!...Just a reminder to people too, triple check all calculations you make in Excel. I accidently put our week interest at a monthly interest calculation - didn't realised for a week or two, when I did the adjustment...$4000 came off the total owing!

Once thats paid out, I will be having a party to say goodbye to bad debt...hopefully forever! :D
 
AndrewT said:
On other good news aswell, I have done a spreadsheet to calculate our bad personal debt to see how much we have wiped off. In April it sat at $40,000 and as of today it sits at $23,172.01! So stoked that we have nearly paid out half that loan in 8 months!...Just a reminder to people too, triple check all calculations you make in Excel. I accidently put our week interest at a monthly interest calculation - didn't realised for a week or two, when I did the adjustment...$4000 came off the total owing!

Once thats paid out, I will be having a party to say goodbye to bad debt...hopefully forever! :D
Click to expand...

Congratulations Andrew,

You are moving forward very rapidly. Shows what can be achieved with a plan.

I agree with you regarding excel too!! Personally I am a bit old fashioned and work out lots of my calculations the old fashioned way with pen and paper! My wife uses excel lots and I am always finding errors!!!

Look forward to hearing how you go with the renovation and the 2nd IP.

Congratulations again,

Regards Jason.
 
So we finally have taken possesion of our first place! Extremely glad it's in our hands now.

1 Day of ownership and we have fully stripped the floors of all carpet, lino and staples! Unfortunately found a 1.5x3m section that needs replacing due to rott which isn't too good but best to do it right the first time.

House also is still out of level after getting a guy in to fix that issue so he is coming back to fix up what he didn't do!!

Just really want to get in and settle in to our first home but I suppose things need to be done properly!!!

I'll post pictures soon.
 
Floor boards are completed now, came in at just under 4k. Mainly because the section that needed replacing cost 1k! Adds up quick...
 
Just completed some more work. We have decided to paint the kitchen and relaminate the benchtops. Although the cupboards are old, it will come up alright for now. Alot cheaper then 7-10k for a new kitchen! Still got alot of work ahead of us, the rest of the rooms need work and I haven't even touched the outside yet.

Still hoping that by the end of the year we can unlock some equity in the house and look at purchasing our next IP.

We have started to grow attached to the house but I think I'll have to force us out to rent by the end of the year to turn this one into another IP aswell.
 
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