Vic Surfcoast property

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Anonymous

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From: Anonymous


Evening all,

Having stumbled across this site about a month back and in indulging myself in the depth of info here, I've decided to come out of hiding and contribute to the discussion.
I'm currently looking around for my second IP and it looks as though it's going to be a close race between somewhere in Melbourne and the surfcoast of Vic i.e somewhere between Torquay through to Wye river.
My current position is that I'm working in the US earning the almightly greenback and will be for a couple of more years before returning home to Vic. I'd be putting down a sizeable deposit on this property to limit my exposure to interest etc etc.

My question is what are peoples thoughts in relation to growth in comparison to one another? Having done some research online and comparing prices along the coast with a 10k radius of Melbourne, there appears to be very little in it.
My impressions and thoughts were that there is x amount of land along the coast and it isn't going to increase due to being hemmed in by the mountains/hills and state forrest and therefore presents a great opportunity for growth in the next 5 - 10 years although it has already enjoyed considerable growth already in the last 12 - 18 months.
Has anyone else done/looked into property in this area??
cheers,

Jules

"Do or Do Not...there is no try" - Yoda
 
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Reply: 1
From: Anonymous


Buy the West coast one, before the baby boomers do! Eventually they will all want to move towards the coast and it is slowly happening now.
 
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Reply: 1.1
From: Arthur A Worley


Hi Jules,
I disagree with the previous reply. Not with the content, about the baby boomers. But you are buying an investment property and as such there are going to be more rental opportunities in the inner city environs. Capital growth patterns over many years confirm that these are the areas that appreciate year after year.
By all means retire to the coast but invest in property in the inner city areas or urban corridors. This is where the best potential is. Especially for rental property.

Regards

Arthur
 
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Anonymous

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Reply: 1.1.1
From: Anonymous


Thanks Arthur - I appreciate the input.
cheers,

Jules
 
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Reply: 1.1.1.1
From: Anonymous


Read the book the Roaring 2000's by Harold Dent first, before you buy. It is in most bookshops and libraries. He forecasts an exodus from the inner cities to the coastal fringes, in the next 10 years. It isnt as stupid as it sounds. His predictions are based on US trends. Inner Melb is grossly overpriced with poor rental returns of 5% or less. If you buy now, you are buying at the peak of the market.
Read the book first and then decide which way you want to go. You will have no trouble at all in renting and getting a good return from your coastal property.
 
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Reply: 1.1.1.1.1
From: E L


I totally agree. As someone who loves spending time at the beach, I can't wait to spend time with my mother-in-law who lives up the Sunshine Coast in Brisbane. And I'm not even a baby-boomer!!
She has seen a 50% capgrowth in her property over the last couple of years. When we've got some equity to play with, we'll be investing up there as well.

cheers
EL
 
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Reply: 1.1.1.1.1.1
From: Robert Forward


Just on the Sunshine coast.

This area has taken a big hit mainly due to being in a HUGE slump for many years. It's a very similar story to most of the South East QLD.

Cheers
Robert

The Sydney "Freestylers" Group Leader.
 
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Reply: 1.1.1.1.1.1.1
From: E L


That's true - there are some areas on the Sunshine Coast that haven't seen any growth for years. I should qualify my statement by saying I'm referring to specific properties in good locations that have got good growth. I still reckon there are some bargains to be had up there though.
EL
 
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Reply: 1.1.1.1.2
From: Kevin Forster



There is only one problem with Vic surfcoast property and that is bushfire insurance would be very difficult if not impossible to get. That area was devastated in the Ash Wednesday fires of '83 and in some cases houses actually in the townships were burnt down.

Probably something to check out

Kevin
 
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Reply: 1.1.1.1.2.1
From: Ruby .


Would have to disagree with you here Kevin.

Speaking from experience.....after losing everything during the Ash Wednesday fires.

We have never been refused insurance or had trouble getting it. We do pay a slightly higher bushfire levy, but it is certainly not excessive.

Ruby
 
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Reply: 1.1.1.1.2.1.1
From: Kevin Forster


Ruby

Just a quick question - I assume you are talking about owner occupier? Insurance companies tend to rate investment properties slightly differently on the premise that owner occupiers will take more care of their property than tenants would.

In that area, there is generally a need to be fairly diligent in keeping trees, bushes, etc under control.

I wouldn't want to be the owner of a property that burnt down and killed half the tenants family even though they didn't maintain the garden. A sharp lawyer may be able to prove you were negligent and the resulting lawsuit damages may be higher than your public liability insurance.

I've noticed that my insurance on my PPOR is less for fire, theft, etc than on my investment properties.

Kevin
 
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Reply: 1.1.1.1.2.1.1.1
From: Sergey Golovin


About insurance -

Was article in paper couple days ago (?) Daily Telegraph (?) talking about insurance and apparently public events cover (sport, markets, shows, etc.) increased by 1600 (?) times, aviation by 500 (?)...
When they asked an insurance expert if people would be prepared to pay, he said - very unlikely...

I wonder what will happen to property insurance in near future or what will happen to insurance companies?

Serge.
 
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Reply: 1.1.1.1.2.1.1.2
From: Ruby .


Yes, your right Kevin I was talking about owner occupier. But, certain points in your post need further investigation and we will be checking them out.

We also have an IP here and haven't had problems getting or being refused insurance, but we will be checking our policy fully.

You can never be to careful.

Thanks for your reply, it was much appreciated.

Ruby
 
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Reply: 1.1.1.1.2.1.1.2.1
From: Anonymous


I will say here that I don't invest down the coast, but my mum and her boyfriend live in Torquay, so I know the area (I was born and lived in Geelong for 25 years). I would take a close look at Torquay if you are interested in that area, as places like Lorne have been sucked dry and property prices are astronomical. Anglesea is pretty much in the same boat (as far as I know; not much but local talk gives a bit of bearing). Torquay is shooting up, but if you're quick, you might find something reasonably priced FOR THAT AREA (the surfcoast I mean). However, you might be just too late. True story: my mum and boyfriend bought block of land about 3 or 4 years ago for mid 60's, ocean views (which risk being blocked by other houses) then bought another next to it about 18 months later, also ocean views (no chance of being blocked - yay!) I think about 74K. This is before Torquay started to get popular. Auctions of blocks of land in same area recently hitting 120 - 130K. Compared to Lorne, however this is cheap. Anyone that's been to Lorne would understand. Not much experience in real estate, but I reckon that due to land being severly restricted in the area (as you would know) prices will only go up (boom or bust). So maybe you might want to think about moving fast before you lose your chance. Maybe even look at Barwon Heads? Just a thought.
 
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Reply: 1.1.1.1.2.1.1.2.1.1
From: Julian Merritt


They were my feelings exactly that as land becomes more restricted down along the coast, and given that councils down there have also implemented a minium block size requirement, that property prices would hold their own during boom and bust cycles. Granted prices may stagnate during bust cycles but I think they wouldn't be as hard hit as what Melbourne would be at this point.
In my current situation with me working in the US for the next couple of years I have the opportunity to be able to pump a lot of equity into an investment of this kind before returning home, and I'd like to get something like this rolling whilst I have the chance to be able to afford it and the baby boomers move camp from metro areas in the next 5-10 years and price me out of the market. As Arthur pointed out - rental opportunities in innner city Melbourne would more than likely be greater than the coastal areas. But in my opinion I think areas such as Torquay and Anglesea are close enough to Geelong to warrant people living on the coast and and still being able to work in a large city (relative to Australia anyway). Although a good rental return would be an added bonus to me, I'd really be looking at this as my retirement property in 15 years from now. Enough rental to cover rates, insurance and maintenance would be enough for me for now.
What I really plan to do is to get as much equity in this property in the next couple of years and use this when I return home for a property in Melbourne. As someone previously pointed out if I bought in Melbourne I would be buying at the peak of the cycle and I would have to tread very lighty in order to not get burnt at this point.

Actually I did look at insurance before embarking on this adventure and was told that there wouldn't be a problem, however I'll have to investigate further on the insurance matter being an investment property. Maybe I'll just put a sign out the front with something along the lines of "...rent at own risk of bush fire..". Yep that should cover me nicely ;-)

I did start reading the Roaring 2000's at a friends place a couple of years back now but didn't quite finish it. It's probably time for a refresher couse for me I think.

Anyway I've employed the oldies who have been into property for 20 years and are now retired to head down the coast on the weekend and scout around for me.
cheers all,

Jules

"Do or Do Not...there is no try" - Yoda
 
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Reply: 1.1.1.1.2.1.1.2.1.1.1
From: Michele B


Actually I was amazed at how the Vic surf coast has developed - I grew up in Geelong in the 60s but hadn't returned till recently when I did a couple of coast drives between ADL/MEL/SYD.

I can remember when Torquay and Anglesea were places you went to collect firewood and Lorne consisted of shacks! When time is compressed like that, you can really start to appreciate both the value of time and the scarcity factor on land, especially the sort that's in limited supply ie. coastline.

I'd look at prime beachfront property seriously if it was also a lifestyle decision. In SA where I now live, agents tell me it's interstaters that are buying up much of our pristine and affordable coastline. Baby Boomers maybe? Don't know, but I suspect a lot of people will want to spend their time in a nice place where they can better preserve their health and sanity, and maybe do business in a less structured way. I think Harry Dent had similar thoughts from memory.

Michele
 
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