My latest purchase: 3 bedroom house in Wellington, NSW.

[mja]

Hi all,

Figured it was time for a bit of an update, since it's been 20 months since I posted here.

Wellington is a tough suburb to rent a house in. If you can find a tenant that is decent, hold onto them with dear life. There are *plenty* of riff raff that want to rent, but can't, because they're well known to the 4 local real estate agents as being troublemakers, thus nobody will touch them with a 40 foot barge pole.

After I purchased this place and renovated it, it took 2.5 months to get a tenant. She moved out and the place was vacant for 6 weeks, in which the place was vandalised - the hot water system had to be replumbed. That's the issue - kids in the town are bored out of their brains and vandalise empty houses for fun.

I'm going to reval my house later this year and see what the new valuation comes in at; you're right - hasn't been much CG for a while. However, my 3 bedroom house rents for $170/week (should be closer to $180/week now), and my mortgage is $60k. Do the maths. This sort of property (or 4 of them) would be great to balance out any negative cash flow from other IPs.

Good luck!

 

[matto_]

mja,

thanks for the prompt reply.

Much appreciated.

So - sounds as though even if you did have 1-2 months of vacancy every now and then the cashflow being generated offsets this?

I read somewhere else, that people have had trouble getting trades in the area. Have you (or anybody else) found this?

Finally - I also read that banks are not lending in the area without LMI? Is this still the case.

Thanks again.

Matto

 

[mja]

Cashflow is great; just factor in about 6 weeks of vacancy per year to all calculations.

I bring my tradies in from Sydney to do renovations, but there are local handymen in Wellington who are more than capable for odd jobs. Any maintenance is done through them. If a trade has to travel from Dubbo, then expect the job to cost a little bit more, due to the travel time.

Finance is a tricky one. I know someone who managed to get 95% lend in Wellington through CBA. Your mileage will definitely vary though. LMI isn't a problem until the mortgage insurers say 'no'. Then it's a pain in the ars3. Every lender is different.

 

[matto_]

mja,

thanks again for your prompt and informative reply.

Did you continue chipping away at your -$400 per week position through wellington, or have you gone down another track?

Have you seen much CG since when you bought for 70k?

Cheers again.

Matto.

 

[mja]

Hey Matto,

Since then, my net position has improved with interest rate drops, rent increases, some hard bargaining on variable rates with my lenders and my wife going back to work.

I still need a couple more Wellington-type properties to be in neutral territory, however.

CG - not sure; I'll let you know when I get the property valued next, and update this thread.

 

[coastal]

Hi mja,

How is everything going with this property... can you please provide an update?

Thanks

 

[jaspn]

*Bump*

Interesting thread. Any updates/news mja?

 

[Dan_p]

Hi all,



This sort of property (or 4 of them) would be great to balance out any negative cash flow from other IPs.

Good luck!

So long as you can get it rented

No point having a great cashflow property that is sitting empty

 

[Monopoly Man]

Hi Guys,

New to this forum so a quick hello to everyone to start

Can anyone please advise on the current rental demand and the quality of tenants at the moment? Also, what are the expected times between finding a respectable tenant?

I have just purchased two properties in Wellington and both are vacant at this stage...

Any advice or input would be most appreciated.

 

[fokas]

Hi all,

It's been a while since I purchased a property, so I thought I'd detail my experiences here about my latest purchase - the figures, the deal, some assumptions, and the problems I encountered.

Some after reno pictures can be found here.

Feel free to ask any constructive questions!

Thanks for sharing and being so detailed! Any chance of re-uploading the after pics?

 

[techie]

mja, how much was the reval? Curious to know. Well done on making the bold step.

 

[mja]

An update on this investment

Hi all!

4 years later, I figured I should post an update. I'll reupload the renovated photos soon.

We hit our serviceability wall after this reno, which means I couldn't get it revalued, so I've left things ticking over.

This property was valued today at $100k, and I've been able to borrow 80% of the value, which means I get the capital invested back and it's still cash flow postitive. It's rentkng for $185/week and a small increase is due now.

I'll be taking the increased funds out to repeat the process, maybe in Wellington, maybe elsewhere. Except I won't wait 4 years between valuations!

Some downsides:

* It's a tough tenant market in Wellington.
* I've had to replace the hot water system because it was old and copper piping to the hot water system because some delinquent kids ripped it apart.
* The underground plumbing to the house cracked. $1400 to replace the ceramic pipe. Ouch.
* My current tenant lost his job and was without income for a few weeks. Funnily enough my property manager found out through the local chit chat. In a small town everybody knows everybody else!

Otherwise, I've had no issues with this property or the town.

 

[mja]

Here's the post renovation pictures again:

 

[ellejay]

Reno looks great. So much fun to get people's investing updates a few years later. I've got an ip similar to yours (or two) bought a few years ago and love the cashflow. Glad you're going again, hope you post some pics of the new place

 

[VYBerlinaV8]

Good work on the reno, and managing the IP.

 

[mja]

Latest update - just inherited a new property manager and after a short discussion, my property is under market rent, so an increase to $200/week has been sent out and will be in effect in 60 days + 4 days postage time.

A valuer went out today, so it'll be interesting what value comes out from their report. I'll update this thread in due course.

15% gross yield on purchase price, probably closer to 10% gross yield if the value is around $100k.

 

[mja]

Last update for now; valuation just came back at $105k. Now to shop around to find a lender who will lend more than 70% LVR.

 

[GreyGhost]

Maybe this one is next..

http://www.realestate.com.au/property-house-nsw-wellington-114453335

I laughed at the tenant in the photo of the whipper snipped, one bare foot, one sock on...

Crazy stuff going on in there!

 

[tasso10]

That is an appalling real estate listing hahaha. Mucho Bueno!

 

[wobbycarly]

I think that's a bit pricey for: "There is also some timber, a fridge, a whipper snipper, a lawn mower and an air blower that goes with the house."