What if i live in a capital gain desert?

From: Cathy Baxter


I love this forum it has opened my eyes so much to the possibilities and variabilities with property and wealth.

And yes i do want to make property my "business" - so aptly put by TW (loved your last post).

In fact in a way property is already our business (own a caravan park), but i want more than that. I'm inspired by all the information, questioning, great answers and honesty of the posters.

I love the idea of buying under value, good yields and good capital gain followed by revaluation to enable the use of equity to then buy again. I also believe that the best research you can do is in the area where you live.

Problem is we've researched our area (regional city - NSW) and there are good yields to be had. But the market is flat, dead flat has been for years - absolutely no growth and if there is it would take a squillion years to build up any equity (except the initial period if you buy undervalue - done that).

So we need to look farther afield, however one of the things i hear so often from you wise people is to invest in the area you know and i fully comprehend why this is advisable.

But we feel that with substantial investment in our town (large commercial property and 2 IPs) that to further invest here is getting riskier.

The closest (< 1 hour drive) towns have populations of 2000 (you can buy $40000 houses - but i don't think this is where our future lies).

So - we are now looking at the North Coast. Here is my dilemna - how to research the area and find out if it is suitable.

Can you give me some clues on how to work out if an area has potential when you don't know it so well? Like - where to start, who to talk to? What to investigate?

Also because of our business we have limited ability to get away. I know - get someone else to do it - I've read the "E-myth" and Brad Sugars "Instant Cashflow" (great read and great practical ideas), that's our other project - working "on" the business.

I don't want the answer - like - "this is the spot", although general views on North Coast of NSW would be appreciated. Isn't doing the research part of the fun of IPs?

Would appreciate any help or views. Sorry for the long post i know it covers various ideas and topics. But i know you'll be able to help you're all so clever.

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Reply: 1
From: John B

Hi Cathy

I find the internet the best research tool.

I constantly go to ljhookers and ray whites site and investigate what type of houses or apartments ar selling and how long they stay on the market. I also use their sites to investigate rental demands and amounts. I also use www.homepriceguide.com.au to get a suburb snapshot and I also subscribe to Australian property investor magazine, another great research tool. The ABS site is also good for population trends etc. I buy Saturdays Age newspaper (Victoria) and read the real estate section thoroughly. I also subscribe to a few of Brisbane's realestate magazines. Queensland have a few great sites like www.brisbanepropertyinformation.com.au which gives each suburb a rating.

If you hadn't already guessed we have 2 IPs in Brisbane and one in Melbourne. We like Brisbanes affordability and most "experts" predict good growth over the next 5 years. Our Melbourne IP is doing well and I'd love to buy IP number 4 in Melbourne (closer to home) but its hard to find a balance between price and a good area. For example, last Saturday we saw a classy 2 bedroom apartment for nearly $400,000 but in Brisbane you can buy a brand new 4 bedroom house with the lot for $250,000 in a reasonable area.

There are some golden rules eg. close to schools, transport, shops, water, good rental demands and close to CBD but this criteria doesn't always apply. eg sunshine coast, gold coast in Qld, Brighton, Hampton, Mornington, Mt Eliza in Vic etc due to proximity to water.

I also live in the country and our town is also flat (but improving) but rental demands are excellent.

I hope this helps

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Reply: 2
From: Rolf Latham

Hi Cathy

If we are talking about NSW there are a few things I can help you with, like real data and statistics.


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Reply: 2.1
From: Robert Longmore

I already have a holiday house up on the Mid North coast, 30 Km east of Kempsey, on the coast. (in the area that was recently flooded), anyway, when i was up there about a year ago, i noticed an unusually large number of Acreage properties for sale, seamed every second farm had a sign in front of it. I returned to the area a week after the floods to inspect the damage, fortunately our area remained dry, but i noticed a distinct lack of for sale signs this time around. i havnt been monitoring prices in the region, the property up there has been in our family for generations, so the only guide i have is the number of signs around. hope this help.
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