Need exp advise...

S

shimi

Hi All,

I'm looking for a +ve IP, I have no idea where to start looking, I own my own home and an OTP (due to complete on 2006). when I bought both of them I was looking on CG only.

I'm located in the eastern suburbs and find it really really hard to find anything around here with positive returns. I read on a lot of +ve IPs in the gold coast, central coast, Hobart and NZ but I don't think I have enough exp to start buying outside my square yet...maybe in a couple of years.

What do you reckon? Does anyone know on +ve IP places in the east suburbs? should I ditch the east suburbs area? I've started my RE journey only a year ago and really don't have much exp...?

I'd really appreciate some suggestion from the exp people around here...

BTW, I love these forums, they are like gold to me (and I'm sure to you as well..)

Thanks in advance.

Shimi
 
Originally posted by shimi

but I don't think I have enough exp to start buying outside my square yet...maybe in a couple of years.
Click to expand...

Going outside the square gives you the experience :)

Seriously, with vacancy rates the way they are, it'll be very hard for you to do +ve properties where you are. You could look into a renovation job, but I don't think you'll get enough...

Take a two week driving holiday and go investgate some rural areas or BNE. Plently of good places have been mentioned recently.

Jas
 
G'day Shimi,

I'm interested to know why you have suddenly changed from being a Capital Growth buyer to a +ve cashflow buyer?

Since you are one who owns their own home in the Eastern suburbs of Sydney, I am intrigued ......

Regards,
 
Sorry Pele,

Over time we have developed a shorthand with regard to places.

We use the nearest airport's code.

It started in the chat room with Sim and JL, both of whom travel for work. They alter their nicknames to the place they are, for example, if Sim is in Adelaide, he will be Sim_ADL, and if JL is in London he will be JL_LAX.

So, as Simon said, BNE is Brisbane.

I just thought I'd explain why we use it!

hope this helps...

asy :D
 
Originally posted by shimi


I'm located in the eastern suburbs and find it really really hard to find anything around here with positive returns. I read on a lot of +ve IPs in the gold coast, central coast, Hobart and NZ but I don't think I have enough exp to start buying outside my square yet...maybe in a couple of years.

What do you reckon? Does anyone know on +ve IP places in the east suburbs?
Click to expand...

Hi Shimi

Why but WHY would you even think of purchasing an IP outside the BEST SQUARE in Australia ? ( I can almost hear the +ve cash flow pro's gritting their teeth).

You say you live in the Eastern subs. Hasn't the CG done well for you ?

What's there to say you can't do it again ?

Don't know about the OTP purchase though, I'm not a fan of those, especially now.

Unfortunately you may not find a cash flow +ve property there unless you buy well and reno, and even that is hard to find.

The last impressive cash flow +ve purchase I heard about was in Wagga Wagga. Excellent returns, I think it was 15%.

So if you want those returns you will have to leave the most impressive square in OZ and venture into vast barren unknown territory. (oooohhh I just had a scary thought):p

Have fun

Investor
 
Shimi,

If your two criteria are "positive gear" and "buy in the Eastern Suburbs" forget it, the two are mutually exclusive, even if you find a reno, you still wont be able to pos. gear unless you buy the bargain of the century.

Say current average Eastern Suburbs gross rental returns are 4% , you do a reno and manage to achieve 6% gross return, its still not pos. geared after interest payments, management fee, maintenance, insurances.....etc..

Look inland NSW or the upper Central Coast or outer Brisbane for pos. geared properties.
 
Originally posted by asy
They alter their nicknames to the place they are, for example, if Sim is in Adelaide, he will be Sim_ADL, and if JL is in London he will be JL_LAX.

So, as Simon said, BNE is Brisbane.
Click to expand...
I had better be careful when I go to my home town of Shepparton.

I'd be GW_SHT
 
thanks

hey guys thanks for the replies...

Les, you are right, I did earned hips in CG and that's why I bought the OTP as well, for CG only, also the completion date is like 3 years from now which gives the CG some time to work and it was a pretty cheap price...BUT it will be -ve return and I can't really afford my self any income deductions no more...

Investor and brains, thanks for the advise, that is exactly what I though...no -ve returns in the East sub...

What about melbourne?
any +ve there?

Thanks again.

I must tell you, if I wil purcahse anything outside the east sub it will be a huge step for me...

Cheer

Shimi
 
OTP?

OTP= Off The Plan

Refers to a purchase of a yet to be constructed building - often an apartment. These are bought with the view to a long period of construction and hence a settlement some time in the future. The purchaser has an expectation of higher capital growth without having to provide a lot of capital - often a deposit bond.

The developer gets access to funds as he can prove to his financier that xx% have been sold and the project has a guaranteed success.

A simple explanation only.

Cheers,
 
Shimmi,

Why not take a look at the back of the latest copy of API mag and you will find rental yields for most capital cities and coastal/rural areas of NSW- all of us seem to be searching for that holy grail of both cashflow and cg. However, in the end, you usually end up sacrificing one for the other.
Remember, though, that in time the rent will go up (that's the theory anyway!) and will cover the mortgage payments. You then have a growth property that shouldn't be costing you anything out of your hip pocket. With the current rental slump, however, who knows how long it's going to take for that to happen!
With +ve cashflow places, however, you can still maintain your lifestyle and buy several places (rural, coastal towns as an example) compared to your one or two -vely geared properties. It all comes down to your current cashflow and what you can afford. With a high income, and money to spare then -ve gearing shouldn't affect you much. If cash is tight, however, then looking for cheaper places that won't cost you anything (except for the initial outlay in deposit, purchasing costs etc) would be a good move. Don't be afraid to explore, as Jas has suggested. It can also be a pleasant surprise to move out of one's comfort zone. You never know until you go, just what you might find :)
Happy Hunting!
 
Hi,

I got a cashflow neutral property on the sunshine coast. Bought for $125,000 and rented out at $175. Valued 8 months after purchase at $165,000. So pretty good growth too.

My sister bought cashflow positive flats in Rockhampton. Large town with a university and a shortage of rental property. Lots of blocks of flats to buy at cheap prices as not enough investors there. Has had very low growth, but some speculation that its coming out of a slump. I plan to buy some flats there myself to complement some neg geared properties.

By the way, I live in Melbourne. You do have to do your homework, but you can move out of your comfort zone. I just jumped on a plane and went for it. I know I'll make some mistakes, but as Kiyosaki says, they are all part of the journey...


Gail
 
And, don't forget (Jan tells this ALL the time...) the usual growth for any property is ~ 15%. You get 15% yield and no Capital Growth, or get 5% growth and 10% yield, or......

Of course, there will be exceptions - "Your mission, should you decide to accept it, is to find those properties that will return more than 15% over time"

Regards,
 
We have bought two OTP apartments in the past year, one in Merimbula, the other in Lakes Entrance. The merimbula property will be nuetral for the first year or two until it become establised and moves into positive. Appreciated around 20% already so we are pleased

The LE property hasnt started construction yet, and wont be completed for two years. Its a large scale resort style devlopment unlike anything else in victoria except perhaps Cumberland Resort in Lorne.

There seems to be a flocking of baby boomers to the coast on retirement and the growth in some of these places is very strong. Any thoughts: anyone else invested in rural seaside towns?
 
Originally posted by Les
And, don't forget (Jan tells this ALL the time...) the usual growth for any property is ~ 15%. You get 15% yield and no Capital Growth, or get 5% growth and 10% yield, or......

Of course, there will be exceptions - "Your mission, should you decide to accept it, is to find those properties that will return more than 15% over time"

Regards,
Click to expand...

very true Les - i think it would do a lot of ppl a lot of good to remember that as well
 
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