Which suburb?



From: Justin Conaghan

Hello all.
I am just starting out on my adventure of property investing. Unfortunately, i didn't get very far before becoming very confused.
I live in the Lake Macquarie/Newcastle area and there are a few suburbs that have been ticking along just nicely,consequently pushing prices out of the reach of my financial limits.
I know i should be looking for the next 'boom' suburb, but i don't trust my judgement enough at this stage.
Are there any companies/people that may be able to guide this keen but green investor 2 be?

P.S. This forum is a fantastic source of information and opinion. To all of the people who so selflessly give their time and knowledge i say a big THANKYOU.

Regards, Jay.
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Reply: 1
From: Gidget .

Hi Justin,

I'm new to this game as well and, like you, am struggling to work out where to buy. One thing I'm finding is that lots of different people have lots of different ideas about where you should buy. There will be more than one right answer. What I've decided to do is to listen to everyone's views, and then work out for myself what I think is the best area and why. In Victoria, the Govt publish a book every year on median house prices with historical data as well. It evidently gives a good indication of which areas are growing but obviously can't predict future growth areas (I'm still waiting to get my hands on a copy!) I think every state publishes a similar publication. Try your state Govt bookshop.

Good luck.

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Reply: 1.1
From: Tristan N

what i try and do is work out why i want to invest in that area, do i want good rental so i can increase my cashflow, or do i want to invest in an area that will be better for capital growth, or can I on - sell what I have brought to someone at a higher price.

you need to have a plan why you want to invest in a certain area first.

"to walk on water, you need to know where the pebbles are"
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Reply: 2
From: Jacque Parker

It really does depend, as the last post points out, what you are investing for. If you are interested in capital growth (keeping in mind that you may be negatively geared for a while here) then do yourself a favour and purchase the residex property returns reports (about $65). They are unbiased and give you all the figures you need. They are on the web. From this you should be able to work out what areas are going to give you good future capital growth. Look only at suburbs that have had consistently good growth over the last ten years.

As for the other approach- investing for income only, you need to do some due diligence and research the areas that have good rental returns. My general rule of thumb is to follow the advice of Steve McKnight and buy properties that can rent for positive returns immediately. He advocates the theory that if you pay $80K you should be getting $160 wk at least in rent. If you can do this, particularly with houses (no strata fees etc) then you will have a positive cashflow.

Work out what way is best for you and then just do it (as Nike say!). The best lessons are learned from doing- get out there and have a go. It's fun!!! Cheers :) Jacque
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Reply: 1.2
From: Dave :)

Hi Gidget,

Regarding that publication you refer to, it's about to be replaced by a
newer edition. I spoke to the Valuer General personally, and he said
that relying on the current (old) edition would not be the best idea.
He noted several suburbs that were classed as 'poor' and now, 12 months
later, are regarded as 'growth - consider buying'.

Just thought you'd like to know.



{Life's short..play hard}
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Reply: 1.2.1
From: Gidget .

Thanks Dave - I'll make sure I get the latest and greatest version!
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Reply: 1.3
From: Justin Conaghan

Hi Gidget,

Thanks for your reply to my post.
I wasn't aware of the publication that you mentioned, but you can be sure i'll be getting my hands on one ASAP.
I guess it all comes down to research and what suits the individuals needs.

Oh it's all to hard, i give up.

Only joking!!!

Thanks to all the other reply's also.
Very much appreciated.


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Reply: 3
From: Miakat .

Feel free to email me at [email protected]

I live and invest in Newcastle and am happy to act a sounding board.

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