Onto Bigger & Better…
T’was the week before Christmas, when all through the house, not a creature was stirring, not even a mouse…
That’s because we @ the wHeregroup are working our absolute butts off… but what a year it has been, our busiest ever and we all need a good few days off to rejuvenate, ready for the 2014 onslaught.
So being the end of the year, it seems appropriate to give yawl (sorry I have been in the USA too much this year) a wrap up of the property market and what to expect from us next year.
The start of the year saw us still investing in the Ipswich region, focused on Springfield Lakes, Bellbird Park & Redbank Plains. It was the tail end of our stint in the region as the mass amounts of bargains were fast disappearing.
wHy? Because the market was on the turn with many more buyers in the market place willing to pay much more for properties than I was willing to pay.
Brisbane will be a good place to keep your eye on over the next 24 months. Properties are selling within days in a lot of circumstances and with very little discount off the list price. And with Springfield Lakes train station now open for business, we will start to see the demographics of the area change too…
The start of the year also meant I had to hit the net, researching for a new location… and a new location we found. This time WA was the place to be… in the Armadale Shire and boy, didn’t I get some flack for this in the media. Supposedly Armadale is the crime capital of the world as strongly expressed by one lady in an online forum, trying to slam me for suggesting this as an area for clients to invest in.
How old school this lady was… yes Armadale has in the past had issues with crime but they are reducing. The other MASSIVE factor here is that she has put the whole of Armadale into one basket. This simply showed her “small town syndrome” mentality and her lack of any research. We focused more so in the Brookdale and Seville Grove suburbs where the population growth is over 5% and rents skyrocketing as a pure result of this. Yields were low to mid 6%’s and with interest rates at 5%, this made for some positive geared properties. What part of that is negative??? All good in my eyes…
Property prices have also consequently soared and we were only investing there for 6 months.
Back to the net researching again saw me identify a new location in WA and a second in QLD (which we can’t disclose as we are still investing there). Since this, I have also identified another location in QLD, which now sees me flying to three locations scouring for bargains.
The year saw interest rates drop, and even more so, fixed interest rates go below 5%… now with the world in a not so nice place financially, I decided for the first time in my investing life to lock in 6 loans myself.
And WOW hasn’t the Xmas buying theory again proven itself to be an awesome time to buy… the last two weeks we have secured a dozen bargains for clients with still more offers out there waiting for vendor replies. We did however have to pull out of a property due to complete infestation of termites in the house. Pays to get a good pest inspector… and one we do have!
Now to throw some more into this, I ventured into the USA property markets with 4 trips over there researching. Being a new venture required a whole new way of thinking, which took time and a whole bunch of patience. But alas we have settled on our first place…
But lets go back even further and recap some of our past locations and how they are performing now…
Campbelltown NSW – we are seeing property price records being broken nearly weekly now. Auction clearance rates are running around 70% which for an area that has never really had auctions before, is an awesome sign of what’s happening. Rents have increased beyond expectations, as a result of the population explosion that’s happening out that way… they are not expanding the M5 for nothing!!!
Wyong – again the market is strong with properties selling within weeks and sometimes days. We are going to get some appraisals done here shortly which will give us a good idea of where we are exactly. But it’s only positive…
Geelong – Just after buying in Geelong we experienced a sudden surge in values and even more so in rents… but unknown to me, Geelong has sat a little stagnant over the last 2 years. The good news now is that it’s turned the corner and on the way coming back. Being Melbourne’s baby sister means it mimic’s what occurs there but three to six months later, and true to this theory the market is showing signs of moving forward again and set for a great couple of years. Ford’s closure has only had a minimal impact on the area, the reason we never invest in sole industry locations. The more expensive suburbs are already seeing growth and this will ripple effect out to Corio where we focused most of our investing.
Onkaparinga Shire SA – we recently had all of our clients properties appraised with some great results. The location has not matured as yet but with some property analysts looking closely at the area we should see more good things to come.
Mandurah – the hidden gem in our recent buying… the location copped such a media battering as again “the experts” catergorised Mandurah as a whole. For those who don’t know Mandurah, it has a lot of canal waterfronts, expensive properties and unit developments not too dissimilar to the Gold Coast. The properties coped a battering when the WA market plummeted, and rightly so… but our focus was on Greenfields, Dudley Park and Halls Head where the property market has made an awesome recovery… and we were there at the right time snapping up some unbelievable bargains that have already seen huge jumps in rents and capital growth. And with no signs of slowing…
2013 Lessons Learned – as much due diligence you do on tenants there are always a bad tenant or two that shine their true colours and we only had a few problems this year. The lesson learned however, was that the owners did not have the correct insurance to ensure they were protected. Although they had house insurance, they did not have Landlord Protection Insurance and consequently had some losses.
In multiple times through the process we recommend this on every deal to our clients but it looks like our message was not being heard. We realised this when we did a ring around and asked some clients who responded with the scary response of no they did not have that insurance…
We quickly jumped onto this with correspondence out to every client by way of a Blog, Facebook, Twitter and an email.
Peoples, we need to stay protected…
Unprecedented – for those who invested with us towards the end of the year, well they experienced a much longer than usual wait to get a property…
wHy? Because we got smashed with new investors coming aboard along with many repeat clients… this blew out our waiting time to a few months as opposed to a few weeks. This inundation of clients became so big that we stopped taking on new clients and literally had a second waiting list of clients waiting to be given the all clear to come aboard.
We were in unchartered waters…
It was definitely time for our annual wHeregroup conference where we put plans in place to tackle this so that all you investors were able to buy properties in a timely fashion.
There are plans in place for 2014 so watch this space…
On a final note: Thank you to all of you for your support during the year and I can confidently say 2014 is going to be an awesome year to be investing in property… but wHere???