On the surface, northern NSW town Bangalow would seem far from an ideal spot to pick up an investment property. The population is small, employment opportunities are limited and rental returns haven’t traditionally been high. It’s also home to multiple colonies of screeching foot-long bats.
It wasn’t an obvious choice for Sydney based entrepreneur Lisa Messenger either. Used to investing to buy and hold in popular capital city suburbs, she dismissed the whole Northern Rivers region as an area where rental returns were too low to justify the $600,000-plus average asking price of houses there.
It was only when she started doing some research that she saw opportunity come a knocking. She realised that beneath the town’s uninspiring investment credentials was a region bursting with tourist potential.
“I realised that Bangalow had a number of strong points,” she says. “People had been telling me for years that they were looking for a quieter tourist escape in the region – and that’s what Bangalow promises.”
Warming up to the region
Some 12km from tourist mainstay Byron Bay, Lisa discovered that Bangalow‘s status as a sleepy town was changing to a cosmopolitan destination popular with day-trippers. It was also slowly emerging as a popular place to stay among tourists seeking a less-crowded alternative to Byron Bay.
Baited, Lisa was still yet to bite. She knew that even though the area’s capital growth prospects were good, vacancies and rental returns would always be a problem. If she was going to invest money into the region she needed a bigger incentive than mere tourist appeal.
It was only when she holidayed in the region in the summer of 2011 that she changed her mind.
“I had just spent two weeks up there doing a house swap with a girlfriend and, coming back to a quiet January, was having a look on Domain – still in holiday mode and dreaming. The first property that came up just looked too good to be true.
“It was an incredible property, which had been on the market for $925k. It was three dwellings: a 2-bed, 1-bath house; a 1-bed, 1-bath studio; and a retreat. I knew that the property could lend itself really well to a holiday letting, so I put in an offer.”
From her research Lisa learned that the house had been on the market for 18 months and had been with three different agents. Without emotional attachment, she put in an offer of $590,000, which the vendor eventually accepted at $599,000.
Taking the plunge
“I wouldn’t have bought the property if it weren’t for the price,” says Lisa. “The garden was overgrown and the house was covered in cobwebs and patchy paintwork. The building report showed really good bones though, so I knew that most of what needed to be done to whip it into shape was cosmetic.”
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