Naracoorte SA or ??

[Farmlad]

G'day everybody,

First post here. I've read quite a bit on here on and off for past year and there seems to be a lot of genuinely good info.

I'm in a position where I can think about buying my first property.

The 3 options I'm looking at are

1) buy a house in Naracoorte to live in
2) buy a house in Naracoorte as an IP
3) buy somewhere where the capital gains are likely to be a lot stronger (I've always liked the idea of Darwin)

The banks hate me because I'm self employed (tax return doesn't look great from their perspective) and a uni student (finishing at the end of the year) but I've got pre-approval for $150K and can probably come up with about a $80K deposit at the moment. The accountant hasn't quite finished this years return but it's looking a fair bit healthier and I'm confident can probably get finance for 250K+, particularly once I finish my degree and am back working full time.

My assessment of the situation in Naracoorte by is that houses are probably worth more than they should be, but rents are pretty good.

The properties I'm looking at locally are 190K-250K, 3 bedroom 1 bath old stone homes which should rent out $250-300 p.w.

I guess I'm leaning towards buying locally for my first house because I can live in it, renovate it if necessary and if I decide to rent it out, I can keep a closer eye on it (I'd prefer to SM). This, however, means that I would probably miss out on the greater capital gains that is possible in a big city which obviously when leveraged can be a fair bit of money.

I'm confident that if I wanted to I could pay off a 200K house after the end of the 2015 harvest, and could look at buying an IP then.

Any thoughts/opinions on the situation or anything else would be much appreciated.

Cheers everybody

 

[Corey Batt]

I've had clients look out those parts, but to be honest the long term potential never seems to stack as highly. Yields are same/potentially lower than a lot of metro properties and the CG is flat for long periods. If you have the savings there and potential strong income moving forward that you can increase that amount, you might be at the precipice to rapidly growing a strong performing investment property.

 

[Farmlad]

If you have the savings there and potential strong income moving forward that you can increase that amount, you might be at the precipice to rapidly growing a strong performing investment property.

Thats what I'm hoping

I've had clients look out those parts, but to be honest the long term potential never seems to stack as highly. Yields are same/potentially lower than a lot of metro properties and the CG is flat for long periods.

Thats a bit what I'm worried about. I guess it comes down to risk vs potential benefits.

I don't doubt a lot more money can be made in a capital city, but it's a fairly big leap to go from looking at properties on realestate.com and reading up on forums to actually buying something on the other side of the country. I was thinking it may be a good bridge to manage one close handy to get the experience for the future, but it could also cost me a lot buying a property that may have minimal growth.

Do you have any suggestions about bridging the gap any other way?

 

[jim1964]

We have decided to move away from Naracoorte for the following reasons
1) Decline in timber industries
2) Decline in vineyard industries
3) New strategy of 100k rule from home

We placed our last freestanding home onto the market around 2 weeks ago,bought in 2011 with a lease to the government to house school teachers,the same tenant remains today,i found the cash flow was always good,the capital gain very average.This home sold 3 days ago so was on the market around a week.Made a bit,but not a lot. http://www.realestate.com.au/property-house-sa-naracoorte-118989603

 

[becaben]

The banks hate me because I'm self employed (tax return doesn't look great from their perspective) and a uni student (finishing at the end of the year) but I've got pre-approval for $150K and can probably come up with about a $80K deposit at the moment. The accountant hasn't quite finished this years return but it's looking a fair bit healthier and I'm confident can probably get finance for 250K+, particularly once I finish my degree and am back working full time.

There are several lenders who will use only your most recent year's financial results so if that is superior to the previous year(s), your borrowing capacity will increase significantly. Combined with an $80k deposit you should be able to purchase properties in a much higher price bracket than what you're looking at currently.