Oakajee Port and Rail OPR - Geraldton

Discussion in 'Where to Buy' started by Alex P Keaton, 2nd Mar, 2010.

  1. Alex P Keaton

    Alex P Keaton Member

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    Oakajee Port and Rail (OPR) - Geraldton

    I am thinking about buying a 2 bedroom unit in Geraldton next year. The units are still quite affordable. Around the $150 K mark!! I think there will be some good CG! But I wander about rental demand and vacancies.

    With this new project going ahead and the jobs created from it there should be a good demand for rentals. But will the rentals be short term? Will I have a problem keeping it tenanted year round? The other thing i was thinking I might have to fully furnish if there are fly in fly out workers, or is there a chance I can leave it unfurnished?

    What are the good parts of Geraldton to buy a unit? Is Beresford good?Augustus Street close to cbd of Geraldton good? Stay away from areas such as?? Rangeway? What other areas are not good to buy into?

    This unit is in Augustus Street. Close to CBD of Geraldton. I'm thinking this street would be a good one? What do you think?
    3/141 Augustus Street, Geraldton
     
  2. sash

    sash Member

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    Hmmmm.....unit for 150k rented for 150pw.

    Let do the maths shall we

    Interest (assume 6.5% IO on 140k) - $8100
    Strata?? - $1500
    Insurance (Landlords) - $ 300
    Rates (water/council)?? - $1500
    Repairs - 300
    Property Fees -$800
    TOTAL $12500

    RENT - $7800

    That leaves you with a shortfall of $4700 less say 1k for depreciation

    The shortfall weekly is about $70pw

    The numbers tell it all...I am not sure about it being a good investment...unless you are CF rich.;)

    PS - try PMing Karina...she has few there.


     
    Last edited: 2nd Mar, 2010
  3. Alex P Keaton

    Alex P Keaton Member

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    Yep I would have to wait a while till rents increased before it becomes cfp. Geraldton could still be an option for me though! It is a lot cheaper than inner city units and atm I can only afford 1 bed. Problem with buying 1 bed is i'd need a 20% deposit, which i dont have.

    I dont have much equity right now being 80% LVR.

    I'd need my Highgate property to increase in value from $260 K to $290 K and my Dianella unit to increase from $210 K to $230 K by the end of next year.
    520/376 = 72% LVR

    I wouldn't need as large a deposit buying regional because it would be a 2 bed.
    Is that right? that you dont need a large deposit when buying in a large regional town/city? Do the banks see it as safe? Can you get by with a 5% deposit?

    5% deposit (of $150 K) = $7,500 plus stamp duty of around $4,500 and a few other buying costs would take it up to around $15 K.


    670/518 = 77 % LVR
    670 (value of 3 properties) / 526 (loans from 3 properties) = $78 % LVR
     
  4. tess85

    tess85 Addicted to SS

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    Kim5

    Seemes a bit tight to me. I know you've mentioned several times the importance of having a buffer. What if you lose your job and can't find one for 6 months? Would you be able to support 3 negatively geared properties? (1 PPOR and 2 IPs)

    I also think it's a good idea to have a CF+ property for every CF- property you own, so that you don't need to keep pouring money into the properties to be able to service the loans.

    Try to find something that you could buy for $150k and rents for $225 pw, I prefer to work on a "multiplier" of 1.5 for purchase price (in $k) to rents (in $ pw).

    Cheers
    Tess
     
  5. Alex P Keaton

    Alex P Keaton Member

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    yeah, sounds like a good idea to have a mixture of both cfp and ng ips. in a couple of years i'll see how my 1st ip is going. If its close to neutral like im hoping for i'll be in a good position to buy again. i'll see how things pan out.

    :)