I thought I'd chime in with my thoughts. Overall I consider myself a balanced investor with no fixed strategy or views. I have inner + outer + regional + interstate, new + old, cheap + expensive, house + unit, HDT + DT + personal name.
I have been investing for 12 years and am always open to new ideas and thoughts.
I will note a few things:
- My 'prime inner suburban blue chip yada ya' apartment in Toorak has averaged a dismal 1-3% capital growth for the last 5 years (2007 -) whilst costing me $18 each year after tax. This has gone nowhere in 5 years and I fell will do poor this year to. It's hard to rent too and a horrible time to sell if I wanted to.
- The two properties I was looking at in Karringal (near Frankston) for $225k at this time that I was going to buy instead would be worth around ~$330k (with good cashflows from day one). I would be up $200k+ had I followed my gut and bought these instead.
- My outer suburban properties which I was advised to sell have consistently achieved around 9%, great cashflow and never a year of negative or no growth. All very easy to rent, not even a week of vacancy per year between them.
- I have invested in Gladstone in Jan 2012. $530k house rented for $900pw and a $600k house just about to rent for $1250pw (fingers crossed!) if I had another $3k of furnishings (maybe a bit less). 10% yields are easily achievable right now, the growth must follow IMO. I fully believe in a long period (5-10+ years) of solid, sustained returns in this area, rather than a short sharp spike boom / crash nor a reliance on a single company, project or industry to a lesser extent.
There's mining towns and there's mining towns.
Agree totally. Personally, I believe don't believe it's good comparison compare Gladstone to Karratha, Kalgoolie and the like.
It's really not a 'mining town' in the same way those places are mining towns, there is substantial agriculture, tourism and other industries in the area. It's much larger and has great lifestyle features (1770, Anges Waters, the Reef, Islands, etc). Technically Gladstone is a city, not a town anyway.
Can I coin the term '
Mining City'?
Remember, as we have no properties for sale I have no vested interest recommending a particular area. And I have significant property assets in the suburbs I recommend to clients - I put my money where my mouth is.
It's always great to have your views on the forum Michael.
I would however mention, unless your Melbourne office would be prepared to go and buy in Geelong or similar (an area which I would happily invest in now, I think it has great prospects) I would argue you
are biased to purchase property in areas which your BA arm services, similar to Wakelins (which is only inner Melbourne).
Also, inner suburbs mean more % commission due to higher prices, another
potential source of bias (not saying you
are biased on this one, just saying it is there). I can't imagine many BA's jumping at 3% of a $180k property, they would need a fixed price model for this.
I am more than happy to be proven wrong on this though and I do recognise your 'inner CG' theory existed before you established your BA service.
I do however believe the times has changed and the way forward is finding value in the micro markets and determining growth drivers, not distances from CBDs and water. It's extra work to adapt to this and therefore bias exists to stick to 'inner CG theory'.
I also recognise that you live your views and put your money where your mouth is. This is excellent and why I've paid much attention to what you have had to say over the years, I probably only have a different opinion of around 10%.
