Positive cashflow suburbs post Elizabeth, Beenleigh and Frankston

[svichy]

Hello,

I always feel like I get on board a couple of months too late to really take advantage of good rental yields for houses in cheap suburbs!

For example, I began researching a potential investment in the Logan City / Beenleigh area about 3-4 months after prices started going crazy and others would snatch up properties way before they listed.

For example, a crappy 2x1 townhouse I was checking out in Woodridge was selling for $189k, and it was going to sell quickly (I was assured). Only a year before, the vendor had bought it for $130k and it was renting for $190 a week. I ended up going for a very nice 3x1 townhouse in a managed complex in Waterford for $200k. Not exactly what I had in mind (and no land value as such), but I still believe it is a good investment returning $255 in rent pw.

Now I am looking at Frankston, and (from my very limited research) it already seems like the same rush is happening there.

Do you think it is still worth looking at these suburbs when it seems like the general population has caught on to the fact that it is a good area?

Also, what do you think are some other areas that have not yet been widely discovered?!?

 

[harrywyborn]

I was a agent selling those sort of units a couple of years ago and now wished i bought them. Mind you the cheapest one i sold after the boom was in marsden for 108K 2 bedroom single lock up. But looking back is no good and im still glad i didnt buy them as the trouble i have had with tenants in lower socio economic areas is enough to drive one crazy.

 

[Harris]

Frankston isn't anywhere close to having positive cash flow properties..! The best you can do when looking for properties that have already hit the market will be around 5% yield.. 5.5% max in some instances.

Its then up to you, how you work on that prop in bringing it close to being cash flow neutral by adding value/ adding a unit at rear etc.

Harris

Hello,

I always feel like I get on board a couple of months too late to really take advantage of good rental yields for houses in cheap suburbs!

For example, I began researching a potential investment in the Logan City / Beenleigh area about 3-4 months after prices started going crazy and others would snatch up properties way before they listed.

For example, a crappy 2x1 townhouse I was checking out in Woodridge was selling for $189k, and it was going to sell quickly (I was assured). Only a year before, the vendor had bought it for $130k and it was renting for $190 a week. I ended up going for a very nice 3x1 townhouse in a managed complex in Waterford for $200k. Not exactly what I had in mind (and no land value as such), but I still believe it is a good investment returning $255 in rent pw.

Now I am looking at Frankston, and (from my very limited research) it already seems like the same rush is happening there.

Do you think it is still worth looking at these suburbs when it seems like the general population has caught on to the fact that it is a good area?

Also, what do you think are some other areas that have not yet been widely discovered?!?

 

[CairnsAgent]

The market is gathering more momentum every week at the moment.
My advice, find a real estate agent you like / prefer to deal with, and stay in close contact with them. My data base of buyers get all listed properties before any advertising, or even before in house publications. This can you give you a 2 or 3 day heads up on other buyers sometimes.

cheers,

 

[Cherry Pro]

Welcome to SS Svichy !

I've recently bought in Elizabeth Downs and the return should be around the 6.5% mark, still not positively geared though.

If you do a search here for Elizabeth, you'll get a better idea of what's
happening in the market there.

Good luck !

 

[Ajax]

I recently bought a 2 bedroom unit in Auburn in Sydney...7.25% gross rental return....its not cashflow positive but a fairly good return for Sydney.


Ajax

 

[Harris]

I recently bought a 2 bedroom unit in Auburn in Sydney...7.25% gross rental return....its not cashflow positive but a fairly good return for Sydney.


Ajax

that is a great return..

Is it a student accommodation/ leased to a hotel/ or anything with commercial tenants or just staight forward residential 2 bed apartment..?


Harris

 

[Ajax]

Harris,

a straight-forward two bedroom apartment...needed some cosmetic work on bathroom.

Ajax

 

[Harris]

Harris,

a straight-forward two bedroom apartment...needed some cosmetic work on bathroom.

Ajax

That's phenomenal return in Auburn for a 2 bed apartment - Well done

Harris

 

[tigerGT]

Yes that is very good. But in Auburn as you know there are sooo many new units there and they are actually an eye soar.. Are you there for cash flow or growth? One reason that I have stayed away from Auburn is the large unit develpments and poor town planning. I went to school at trinity in Auburn but Auburn has changed so much in the last 10 years...

Very good return though, well done.. I just worry about the unit price not going anywhere as there are so many new ones being built all the time...

What do you think??

 

[tigerGT]

I recently bought a corner block in chester hill with site potential for duplex / Child care. I am set to get a return of 6.98%

I was happy with that, 7.25% is great !

good work

 

[Peter Parker]

An u/f 3br brick house in a cheap outer suburb of Melbourne purchased has got 6.5% gross yield on a rent of approx $5-10 below average. Apart from the good purchase price there was nothing unusual about the house.

Rents in the area for that sort of property grew by 7% in the last year; if this rate is sustained for 2 years (pundits are suggesting no relief before 2010) the yield by then should be 7.4% on purchase price.

By that time we might well see the 'average' 5% yields typical of outer suburbs today increase to 6 or even 6.5%.

Peter