New your opinion. TO sell or keep Geelong property?

Hi all. Just need an opinion from people, expecially those who live and know the market in Geelong.

I have an investment property currently rented out to a family. It is a 4 bedroom 2 car garage 3 year old home in the Deakin University Estate Highton(the houses directly across the road from Deakin Uni in Waurn Ponds).

As I moved back to Melbourne 2 years ago, I am thinking whether I should sell the property or keep it as rental income?

Does anyone know whether the prices in that area of Highton (near the ring road) will rise? I have noticed prices have not moved much in that area of Geelong and think whether it is better to sell now and use the money for a property back here in Melb where the capital growth is higher. I just don't want to leave it too long as the prices in Melb are going up every week and want to get in ASAP, especially if the growth in that part of Highton is going to be very slow. As I also live so far away from Highton, it is hard for me to keep in touch of the property and have to fully rely on the agent.

What do you guys and gals think?
 
Drewy

I ahve recently bought a place down your way in the last 2 months, the reasons I had going for it were

- They have done up a number of the plaza's
- I think the bypass will actually help Geelon, the place I bought I would never have bought 5 years ago as it had heaps of traffic going through the area, you see it now and the locals love it
- The have had a revamp of there councilors and the new ones want to grow the area to really make it a new CBD for victoria outside of Melbourne
- Avalon I believe with there new proposal will get more international flights coming /going


There are many more reasons but I believe it is going to grow, one thing on the type of property I understand you would get a lot of Uni people wanting to rent there but there is not a lot of 4 bedroom places in Geelong. For additional cash have you considered student accomodation and renting it by the room
 
Just need an opinion from people, expecially those who live and know the market in Geelong.
With the greatest of respect, no you don't. What you need is an investment strategy written down and then you need to execute said strategy. ;)

Does anyone know whether the prices in that area of Highton (near the ring road) will rise?
NO-ONE on the planet knows the answer to that Q drewy....EXCEPT to say, that in 10 or 20 years from now, I'd take a bet that prices there will be higher than they are now.

I have noticed prices have not moved much in that area of Geelong and think whether it is better to sell now and use the money for a property back here in Melb where the capital growth is higher.
And when Melbourne stops growing at 17% pa (good year 2009) and does 3% (say) CG and Geelong does 10% are you then going to sell the Melbourne property and buy back into Geelong? :eek:

I just don't want to leave it too long as the prices in Melb are going up every week and want to get in ASAP, especially if the growth in that part of Highton is going to be very slow.
You don't know if Melbourne will keep going at present rates and you don't know if Highton will continue to be slow. Never do anything in a panic. Analyse by all means and take action but don't follow the herd.

As I also live so far away from Highton, it is hard for me to keep in touch of the property and have to fully rely on the agent.
That is surely one of the reasons you hired an agent in the first place, yes?

What do you guys and gals think?
I think you need to keep the emotions in check drewy. There is no room for emotions in investing.

Then I think you need to think about the fact that you will trash $30K just selling in one place and buying in another.

And then I think you need to keep Geelong and buy in Melbourne (or anywhere else that takes your fancy) and perhaps just refi a deposit (if you can) out of your Geelong property.
 
With the greatest of respect, no you don't. What you need is an investment strategy written down and then you need to execute said strategy. ;)

NO-ONE on the planet knows the answer to that Q drewy....EXCEPT to say, that in 10 or 20 years from now, I'd take a bet that prices there will be higher than they are now.

And when Melbourne stops growing at 17% pa (good year 2009) and does 3% (say) CG and Geelong does 10% are you then going to sell the Melbourne property and buy back into Geelong? :eek:

You don't know if Melbourne will keep going at present rates and you don't know if Highton will continue to be slow. Never do anything in a panic. Analyse by all means and take action but don't follow the herd.

That is surely one of the reasons you hired an agent in the first place, yes?

I think you need to keep the emotions in check drewy. There is no room for emotions in investing.

Then I think you need to think about the fact that you will trash $30K just selling in one place and buying in another.

And then I think you need to keep Geelong and buy in Melbourne (or anywhere else that takes your fancy) and perhaps just refi a deposit (if you can) out of your Geelong property.

Thanks for your comments. They make sense. From what you are telling me, it is best to keep the property in Geelong. I am not in a situation where I need to sell the property, so I guess it is good to keep it.

I might also check out your website.
 
Just to elaborate a little more:

I am a very strong advocate of buy and hold. Unless a property is such a drain on your situation, that it stops you positioning yourself in a market with more potential. But just to be clear, it would have to be a pretty big short term drain!!!

That been applied to your situation: How much negative cash flow does it incur? Does your income allow you to move deeper into -ve cash flow territory? Do the 30K selling costs justify the move into a market with more potential? Does the market have more potential?

To answer some of these questions for you:

If it is pretty -ve cashflow, then what can you do to increase rents (quick reno? Move rents up to market? etc etc There is a good article in the latest edition of Your Investment Property on this!!!)... Consider moving to IO loan etc etc.

I would say that the $30k selling costs are not justified in moving into the melbourne market, because we all know these markets are cyclic, and the ripple effect I would imagine would extend down to Geelong (ie. Sydney and Newcastle). Generally Newcastle follows where a Sydney boom left off... Ie. Sydney 2000-2003, Newcastle 2003-2005. So it is false economy to move into this market, when the market you are in will catch up!

I would suggest doing everything you can to keep Geelong AND buy in Melbourne!
 
Hi all,

We own property in Geelong, it does tend to follow the ripple effect from Melbourne.

Your area is all new housing, which is why the prices are flat. The increases a few years ago in 'median' prices was all due to more new expensive houses being sold.

There is no shortage of land in the area with future new areas being all the way to Mt Duneed. Along the lines of houses depreciate, land appreciates, this area will have a high depreciation rate of the dwellings yet a fairly low appreciation rate of the land. In other words don't expect a huge boom in prices, unless the new areas become much more expensive as they are developed.

I tend to agree with everything proportunity stated earlier.

bye
 
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