Investing in Mount Gambier

[WelderGuy5]

Hii

Any recommendations/suggestions for investing in real estate in Mount Gambier. 

TIA

[DIG85]

I have a rule never to invest in regional Australia. 
 

Poor transport, poor infrastructure, no prospect of significant increases in real wages and therefore nothing to increase house prices above that could be obtained in the capital cities. 
 

I would only invest in Sydney, Melbourne or Brisbane.

[Parley]

Not everyone can afford to invest $1M in a capital city.

The positive aspect to regional locations is the purchase price will obviously be a lot less. The investments may also be positive geared as opposed to negative gearing in the major capitals.

[Marisawright]

51 minutes ago, DIG85 said:

I have a rule never to invest in regional Australia. 

Poor transport, poor infrastructure, no prospect of significant increases in real wages and therefore nothing to increase house prices above that could be obtained in the capital cities. 

I would only invest in Sydney, Melbourne or Brisbane.

I disagree. Investing in regional Australia can be very lucrative.  It's a question of attitude.

When you invest in shares, for instance, you can choose whether to invest in shares that pay good annual dividends, or in shares that pay small dividends but will make strong capital gain.  It's the same with property. 

Traditionally, Australians have always been totally focussed on capital gain (i.e. the growth in the value of the property).  Some even take on such a huge loan that they're making a loss every year, all for the sake of making that capital gain.   Over the last several years, that has paid off as house prices have grown to a lunatic degree.  If there is ever a housing bust, of course, those people will have egg on their faces.

People who invest in regional Australia take a different attitude.  Property is very cheap, and rents are high in proportion to the value of the property. Where an investor might only afford a unit or townhouse in a city, they can afford a house on real land in a country town.  There will be little capital growth, but the regional investor doesn't care, because they're making a nice profit every year, thank you very much.  It's a slow and steady investment rather than putting one big bet on future property values. 

As always, different investment strategies suit different people.

[ramot]

1 hour ago, DIG85 said:

I have a rule never to invest in regional Australia. 
 

Poor transport, poor infrastructure, no prospect of significant increases in real wages and therefore nothing to increase house prices above that could be obtained in the capital cities. 
 

I would only invest in Sydney, Melbourne or Brisbane.

Sunshine Coast is regional, in case you don’t know  house prices have sky rocketed here, lots of people moving out of Sydney and Melbourne to live here, as so many can work remotely now.

[Blue Flu]

1 hour ago, DIG85 said:

I have a rule never to invest in regional Australia. 
 

Poor transport, poor infrastructure, no prospect of significant increases in real wages and therefore nothing to increase house prices above that could be obtained in the capital cities. 
 

I would only invest in Sydney, Melbourne or Brisbane.

Yes my take on the matter. I'd suggest there has been substantial price rises already on housing in bigger, more attractive settings. One could buy, at risk, in less attractive areas of some of the places , but be prepared to live with the consequences. Is it worth the possible grief? 

[Blue Flu]

23 minutes ago, Marisawright said:

I disagree. Investing in regional Australia can be very lucrative.  It's a question of attitude.

When you invest in shares, for instance, you can choose whether to invest in shares that pay good annual dividends, or in shares that pay small dividends but will make strong capital gain.  It's the same with property. 

Traditionally, Australians have always been totally focussed on capital gain (i.e. the growth in the value of the property).  Some even take on such a huge loan that they're making a loss every year, all for the sake of making that capital gain.   Over the last several years, that has paid off as house prices have grown to a lunatic degree.  If there is ever a housing bust, of course, those people will have egg on their faces.

People who invest in regional Australia take a different attitude.  Property is very cheap, and rents are high in proportion to the value of the property. Where an investor might only afford a unit or townhouse in a city, they can afford a house on real land in a country town.  There will be little capital growth, but the regional investor doesn't care, because they're making a nice profit every year, thank you very much.  It's a slow and steady investment rather than putting one big bet on future property values. 

As always, different investment strategies suit different people.

I'd suggest that boat has sailed, or about to depart . I have been an observer of larger WA town properties especially, and most anything decent has increased to close in on city prices. Those very small places that are 'very cheap', are so for a reason. Obviously one can be lucky , but far from a sure thing. I'd suggest the likelihood of pain in those markets when interest rates rise shortly and values fall.

[Marisawright]

1 hour ago, Blue Flu said:

 I'd suggest the likelihood of pain in those markets when interest rates rise shortly and values fall.

Which one - the going into debt to fund loss-making properties in hope of future capital gain?  Or buying properties in regional towns which won't see much capital gain, but which make an annual profit from the rent?

[Blue Flu]

4 hours ago, Marisawright said:

Which one - the going into debt to fund loss-making properties in hope of future capital gain?  Or buying properties in regional towns which won't see much capital gain, but which make an annual profit from the rent?

Firstly they have to be those wanting to rent those houses. A different call when rentals are hard to find most anywhere. Never a fan of loss making properties, but rural must pick well. Places like Mt Gambier have a lot of 'social' issues we'll call, just for the convenience of not being called repetitive. 

[Marisawright]

33 minutes ago, Blue Flu said:

Firstly they have to be those wanting to rent those houses. A different call when rentals are hard to find most anywhere. Never a fan of loss making properties, but rural must pick well. Places like Mt Gambier have a lot of 'social' issues we'll call, just for the convenience of not being called repetitive. 

I have no idea about Mt Gambier in particular.  Good rental properties are hard to find in most rural areas/small towns, which is why the rent is disproportionately high.  Of course it goes without saying that you have to do your research before buying.

[rammygirl]

It very much depends where you are on the investment cycle and what your other income is etc etc. investing for income is different to investing for later capital gain. There is no answer as everyone’s circumstances differ.

I wouldn’t call Mt Gambier a growth area though, in fact I was disappointed when we stayed there, still a very hum drum, backward  place compared to other similar sized towns in VIC just over the border.

[Blue Flu]

15 hours ago, Marisawright said:

I have no idea about Mt Gambier in particular.  Good rental properties are hard to find in most rural areas/small towns, which is why the rent is disproportionately high.  Of course it goes without saying that you have to do your research before buying.

I do and wouldn't touch it. But hardly unique in that. Actually it depends on the rural town you are referring to. There are still a number of small places struggling with population loss over the years and a loss of infrastructure. There are numerous houses in large towns, I'm thinking off , poorly built and in dubious neighbourhoods to say the least. 

[benj1980]

A Principal from Mt Gambier only called me this week, a family has moved to the area. Families have reasons to move in and out of these places. I think you very much need to do your own research and have your own plan for the property as has been suggested before. Only you know if the numbers will work in your favour.