Thanks everyone
Hari, would you invest in units in sunshine or just houses?
Altonz,
This is a very nice question you have asked. I have been a Investor for so many years. I have invested in CBD, Middle Ring, 23 Km away from city, Country Side, Commercial properties and Overseas. Invested in Houses, Apartments, Offices.
Country Side Investment in Shepparton and Mooroopna. It was very important to mention the location as to compare all Properties.
In the beginning, I used to look at buying the properties which are cheap and fall in my mental price range. After reading many magazines and talk to real successful people, I have started to look at the Middle rings and City.
Country Side Investments Advantages.
1) Cheap to buy thats all.
Country Side Investments Disadvantages
1) Rents dont increase as much
2) No capital growth. Banks give you very low Valuation. Cant leverage on them.
3) We would think they are growing in prices. But Valuation time. They are not good. Stuck in 1990's.
4) Agents fees are around 7 - 10 %
5) Water Bills are same or more than city property. even it is 100K property in country or 500 K property in the city. You are paying Drainage and sewage charges almost the same. Very high in Country side.
6) Council rates are very high. Councils need to collect more money because too less properties there.
7) Taking expenses into consideration with the less rent you get, in my view you loose all the benefits.
8) Due to less tradies, Price can be little high. for repairs.
9) House grown on par with Construction costs - Depreciation.
Investing in City Properties.
1) All the house close to city has grown more in Value even in recession or bad times.
2) Banks Valuations are close to our expectations
3) Leverage is more.
4) Rents are increased consistently
5) Water rates doesn't seem much for the rent collected.
6) Council rates are on par with the Country side property, even though the price is 3 times the country side property.
7) Over all the expenses do not seem much compared to rent we collect.
8) Real estate charges are around 4% (some pay 5%).
9) Renting is easy
10) Trade people charges are quite competitive.
If I know what I know 7 Years ago. Rather have one Foot of land in Middle of City than 10 acres in Country. Sometimes it is not about just land and a house anymore. Now are entering into new era of city life.
Small example, Melbourne CBD in 1987 has 7,000 population. Now it is 100,000. Melbourne is not a doughnut in the nights anymore.
All Australian Capital Cities are moving towards, London, New York model.
Its is not what you buy, Where you buy. Recently we bought a apartment in the City, We are getting rent of $3200. Signed for 2.5 years. It is positive cash flow even the interest rate goes upto 7%.
If it was me Altnoz, I would rather buy a Unit in the Sunshine rather than house in country side.
Please post me any questions you may have.
Thank you
Hari Yellina