…finding easy cashflow AND capital growth….

When a brief requires the ‘out of pocket’ monthly costs to be close to zero for an investor, the implication is that they will need to consider a property which carries some downside. It could either a risky investment, a tough studio apartment or …. a regional investment.

We don’t endorse risky strategies, mining towns, tiny studios,or managed apartments.

But we do support regional investment strategies when the metrics are right.

A suitable regional town must offer a strong, stable (and not contracting) population. It must feature a range of employers; from white collar to manufacturing to hospitality. Schooling, infrastructure and hospitals must be well regarded, and a bonus is on offer when the regional city is an easy day-commute away from a major capital city.

We make no secret of the fact that we like Ballarat very much.

Greater Ballarat is home to just-on 100,000 people, boasts some premier schools in the state, offers a wide range of employment from hospital work to university jobs, de-centralised government positions, long term manufacturing roles and is home to an IBM office. Best of all, the train commute on the recently upgraded western rail line is just 64 mins to Southern Cross at peak times. It’s easy to see plenty of Melbourne-bound commuters on the VLine platform at 7.20am Monday to Friday.

So what is it about Ballarat that sets it in our sights for certain categories of investor?

Ballarat has exhibited over 5%pa median house price growth over the last 20 years. In some of the more tightly held suburbs, this figure has eclipsed 6%. While this figure does not outperform inner-ring Melbourne suburbs, well located Ballarat house performance does count for more.

Gross rental yields sit around 5.7% and sometimes 6% for well-selected, 3 or 4 bedroom houses.

This means that an investor can enjoy close to cashflow neutral performance; and in this current interest rate environment, the asset is essentially a ‘set and forget’ asset when the following five outgoings are taken into account:

– mortgage repayments
– insurances
– rates
– property management fees, and
– maintenance (ongoing).

We remind our clients that Ballarat offers a moderated growth, however it is an ideal option for many, as it allows a sub-$300K investor (and often $250K investor) an opportunity to buy a quality house in a stable environment and has consistently delivered stronger rental yields than our major cities.

We jumped at the chance recently to secure this fantastic 3BR, 2 bathroom plus study house with double garage in sought-after Brown Hill. We proudly secured the property for $345,000 and our lovely clients can anticipate a $360 per week tenancy; and perhaps even more as we head into warmer months.