Purchasing in VIC - Frankston Area #2

Frankston named hotspot by TAFE's "Property Professor" Peter Koulizos

I'm told this months edition of Australian Property Investor magazine has placed Frankston and Seaford as Number 1 & 2 of Australia's hotspots. The report was prepared by TAFE's Peter Koulizos, who is sometimes identified as "The Property Professor". It's worth reading. Can someone please post the link to the full article here?
 
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http://business.theage.com.au/business/melbourne-in-housing-recovery-20090630-d3uk.html

"A FIVE-MONTH surge in Melbourne house prices has undone the damage to the property market wrought by the global financial crisis, pushing the median house price to $469,357 and the median unit price to $377,077 — both record highs.

Melbourne houses that were sold in May stayed on the market for an average of just 29 days, the shortest period in Australia. The most dramatic price rises have been away from the centre of Melbourne, in Hume in the west, eastern outer Melbourne and Frankston......"


So I guess Frankston appears to be back on the boil... Inner melbourne has been witnessing historically high auction clearance rates and Frankston has started to register again on the hotspots reports, property commentators and in the media.

Harris
 
Great to see you back Harris, where have you been hiding? Can you elaborate on the tennant quality in Frankston please, as I am once again on the prowl for my 3rd IP, but looking at Frankston South, as I would expect, but uncertain that the quality of tennants would be better?
 
The_Bludger said:
Great to see you back Harris, where have you been hiding? Can you elaborate on the tennant quality in Frankston please, as I am once again on the prowl for my 3rd IP, but looking at Frankston South, as I would expect, but uncertain that the quality of tennants would be better?
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Tenant quality in Frankston is mildly speaking "quite average". While I would not stereotype people into categories based on their demographics, I dont know how else to state the obvious...


Some of them are feral.. although still manageable. From trivial issues that need plumber called 10 times for the same problem to more complex "neglect" issues like pool maintenance (not done and cost thousands), late rent, one runner, leaving property in very undesirable state, leaving without notifying, insisting on new cooktops, ovens and air-conditioners because one little thing would not work in the oven or one setting of AC isnt right, just massive amount of recurring issues that require a lot of patience and time.

The property managers are not blameless either however I have concluded with a dozen tenants in Frank and almost 3 years of dealings that I have to single out the quality of tenants based on the area.

I think it has more to do with a total lack of ownership (even for a rent paying tenant) and total disrespect of the house and an attitude of sheer neglect by those tenants. We have properties in a number of other areas in melb and interstate however cant even draw a remote comparison between the quality of tenants.. (even with places like regional queensland).

Like I have said before, it is manageable. My issue is the lack of time to focus and micro-manage which I am very short of so perhaps they appear to be bigger in scope than they really are..

As a side note, it is worth checking rental statements on a very regular basis. We failed to check what had been coming into the account for rental payments over the last (almost) 18 months and realised big discrepancies (only in Frankston) and many months where we had been short changed by thousands of dollars. Currently going through a thorough audit to determine the extent of the problem. Prop manager is blaming us for not having time to consult with her and hence she authorised many expenses on our behalf even though she wasnt allowed to do that for anything over $500.
No doubt that we are at blame too... however in summary our portfolio exclusive of Frankston has been on auto-pilot and has given us probably 1/10th the amount of grief compared to Frankston portfolio.

Harris
 
Harris said:
Tenant quality in Frankston is mildly speaking "quite average". While I would not stereotype people into categories based on their demographics, I dont know how else to state the obvious...


The property managers are not blameless either however I have concluded with a dozen tenants in Frank and almost 3 years of dealings that I have to single out the quality of tenants based on the area.

Harris
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Hi Harris,

Thanks for your honest report on the tenant situation in Frankston. I only have 2 IP's there, and because of this reason would be reluctant to buy more in the area. We did find though that once we renovated one of our IP's we attracted a great tenant. The other tenant is ok, but pays irratically. Some months the tenant will pay 1.5 times what they need to, the other times half the amount!! I check their statement regularly and have formed my own excel spread sheet to keep track of payments. At the end of each financial year I have found that the income received for this property balances. We have had these tenants for a number of years - they are not ferral, and keep the property in a reasonable condition.

Sounds as though you are getting to the bottom of your problems with your Frankston properties. Are you able to say who is managing your properties?

Regards Jason.
 
jingo said:
Hi Harris,
I check their statement regularly and have formed my own excel spread sheet to keep track of payments. At the end of each financial year I have found that the income received for this property balances. We have had these tenants for a number of years - they are not ferral, and keep the property in a reasonable condition.

Sounds as though you are getting to the bottom of your problems with your Frankston properties. Are you able to say who is managing your properties?

Regards Jason.
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Well... goes on to prove that there are good quality tenants there too but we have had more than our fair share of ordinary ones.

Re the rental discrepancy, I will wait and get all the facts before concluding who is to fault and if I should name the agency managing our portfolio. Some correspondence from the agency (which we assumed to be rental statements) still lay unopened in envelopes after months... so its a 2 way street.

But lets put everything in perspective with the following :

If I knew in hindsight all the tenant issues I have experienced in my last 3 years in Frankston, it would not have stopped me from investing there at all.

My Frankston North properties have appreciated by almost 80% in the last 3 years and cost us bugger all to hold. Others are up around 20%-30% in the last 24 months, so overall I dont regret a tiny bit my decision to choose Frankston as my desired investment area. I believe that it has still a long way to go.

Harris
 
Good to have you back Harris. Sorry to hear you've had so many problems with your rentals.

I have 2 rentals in South Frankston and one in Marylands. The two in South always pay a month in advance and look after the homes as if it were their own. The one in Marylands is a single father, who has paid fortnightly for 5 years and whilst this has been a little painful, have had no real problems.

So far, so good.



Toni
 
Harris said:
But lets put everything in perspective with the following :

If I knew in hindsight all the tenant issues I have experienced in my last 3 years in Frankston, it would not have stopped me from investing there at all.

My Frankston North properties have appreciated by almost 80% in the last 3 years and cost us bugger all to hold. Others are up around 20%-30% in the last 24 months, so overall I dont regret a tiny bit my decision to choose Frankston as my desired investment area. I believe that it has still a long way to go.

Harris
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And this is the key to it all - great capital growth! :D

Regards Jason.
 
Frankston Leader 13/07/09

More news on the Frankston Marina;-

http://frankston-leader.whereilive.com.au/news/story/no-way-frankston-beach-will-go/

In May, Planning Minister Justin Madden gave the go ahead for the project and following council approval next month the project will go to tender.
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“In fact, this marina is a good thing for Olivers Hill because the engineering that needs to be done there to stabilise the hill once and for all will at last be done, rather than continuing piecemeal work,” Mr Byrne said.
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Leader Newspaper - 4/08/09

Companies interested in constructing the new marina can at last come forward following last night’s council decision to start the tender process.
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Registrations of interest will be invited, which the council will consider until September 8, after which those with experience in major projects will be given more information following confidentiality undertakings so they can prepare for Stage 1 of tendering.
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http://hastings-leader.whereilive.com.au/news/story/frankston-marina-is-out-for-tender/
 
Bet anyone a bottle of bubbly that there will always be a luddite out there who will find some excuse not to invest in Frankston even though the approved marina is all but built. Some of the pessimists from earlier this year have a lot of egg on their faces. Far from crashing, Frankston prices have outperformed the rest of Australia. And more to come - even if the luddites say otherwise. Personally, I wont pay attention to those who purport to own property locally but, in reality, own nothing more than their own cars and a real estate licence to sell houses at fire-sale prices.

Local investors/owners should thank the world class planners and local politicians at Frankston Council. They've worked over a decade to bring this marina to fruition. History will be their judge, the shrill voices of the pessimists will be forgotten in a few years.
 
The_Bludger said:
I've been looking at Franga's recently.....Frankston ain't going nowhere for a while. Is it just me seeing this?
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Dont mean to rain on your parade but 4 months is a long time and you've been proven wrong. Watch those median figures! Regardless of yobbos, bogans, luddites or Frankstonites, Frankston is not what it was when you posted 4 mths ago. Frankston rocks!

In a generation from now, and probably much less, Frankston will be highly exclusive territory by virtue of its geographic location. The naysayers like Frankstonite will still be buying lotto and criticizing a great suburb as they collect their pension cheques in a few years from now as the investors rake in the returns. Not meaning to be smug at all. Just hypercritical of those losers who once said the marina would never happen. Equally hypercritical about those who exaggerate about the so called bogans/crims who reside locally. Personally, I know lots of academics, professional people and self funded retirees who have made the move to Frankston. They seem unperturbed about the negativity. Feel free to pierce our balloon with irrelevant minitunae. This growth is eminently sustainable - FRANKSTON ROCKS!
 
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newhigh said:
Dont mean to rain on your parade but 4 months is a long time and you've been proven wrong. Watch those median figures! Regardless of yobbos, bogans, luddites or Frankstonites, Frankston is not what it was when you posted 4 mths ago. Frankston rocks!
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Fair enough, but the same goes for the rest of Melbourne. In the last 4 months, all of it is moving quickly, not just Franga's. I really do hope that Frankston moves also, a lot of people have invested there and I would love to see these people make money. People sacrifice a lot to get ahead in life and it's these people I respect most, so well done.

All the best newhigh!

PS. I'm just not particularly thrilled with the types of people that live there, so find it difficult to throw money at the area, but we are all different and we all have our own strategies.
 
The latest REIV figures for Frankston indicate a June qtr median of $310k. If anyone sees any cheap houses with investment/development potential, why not post the links here and lets all share our opinions as to the potentiality? There's plenty to go around, why not share?

Oh yes, we know how terrible a place Frankston is......but we are still looking for bargains *wink* If the place was so terrible none of us would be posting here.
 
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Marina work set to start next year - Frankston Independent 11/08/09

THE Frankston marina to be built at the base of Olivers Hill has been put out to tender and Frankston Council says work on the controversial project will start next year.

The council voted last Monday to start the public tender process following approval by Planning Minister Justin Madden of one of the project's final hurdles - changes to Frankston's planning scheme.
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http://www.frankstonindependent.com...rina-work-set-to-start-next-year/1592061.aspx
 
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Frankston eyesore set for $80m hotel project - Leader Newspaper - 10/08/09

PLANS to redevelop the Peninsula Centre into an $80 million luxury hotel have finally been approved.

Two years after the Deague family’s Asian Pacific Building Corporation paid $11.25 million for the 12-storey building at 435 Nepean Highway, Frankston Council has approved plans to redevelop it into a 140-suite hotel, function centre, conference centre, restaurant and bar.
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http://frankston-leader.whereilive.com.au/news/story/frankston-eyesore-set-for-80m-hotel-project/


Toni
 
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