The Gill family: Kiama
Prospective sea changers, the Gill family, were keen to secure a foothold in the coastal property market before orchestrating the big move.
A fire fighter originally from Bowral in the picturesque New South Wales southern highlands, David Gill had just been transferred to the coastal city of Wollongong. Realising that it could take up to two years to sell their home, the Gills immediately decided to secure a property in the vicinity of Wollongong.
The plan was to rent the property out until the Bowral house was sold, and then move there permanently. Rather than buying in a suburb of Wollongong, David was lured by the rolling green hills and beautiful white sand beaches of the coast immediately to the south.
“I was looking to buy anywhere along the coast from Minnamurra, which is just north of Kiama, all the way down to Huskisson in Jervis Bay,” says David. “Prices are fairly similar all the way along the coast – even as far south as Batemans Bay, because it’s a popular holiday spot for people from Canberra.”
As the Gills were investing primarily for capital gain, they sensed that it was the perfect time to jump into the market and snare themselves a bargain. “I think it’s a good time to buy because the market is quite flat. I was in a good position to make offers that a few years ago would have been ridiculous,” says David.
The Gills bought an unrenovated four-bedroom house in Kiama, about a half-hour drive south of Wollongong. The range of amenities both within Kiama and in nearby Shellharbour, notably including a good primary school, helped the family make up their mind.
“I bought one of the ugliest houses in the right street. I’m buying for the long term: I’m not trying to rent it out for a couple of years and get out. I’ll probably rent it out for two years, as long as it takes to sell the house at Bowral, and then move in,” says David.
Although the Gills were shopping around for a house in which they eventually intended to live, they didn’t feel at a disadvantage in being able to select a property that would be attractive to potential tenants.
“I’m of the opinion that if I like it, then chances are that someone else will like it. It’s not the sort of place that would appeal to retirees because it requires a bit of work. I think the property will attract a young family like us – the parents would probably commute to Wollongong,” he says.
For the Gills, finding a long-term tenant was the obvious choice over letting the property out as a holiday rental. “It’s not suitable for holiday rentals, because it’s not an attractive-looking property! But the house is a two-minute walk to the beach, and has filtered water views. It will do us for the next 10 years or so, until I’m ready to think about downsizing,” explains David.
Richard Salmon: Port Macquarie
If you’re a young first homebuyer and you’re noticing that house prices are increasingly spiralling out of reach, the answer to ‘how am I going to get on the property ladder?’ may lie with a coastal investment.
This is how Richard Salmon made inroads into the property market – like many twenty-somethings, he couldn’t afford to buy where he wanted to live in Sydney – instead he cast his eye along the New South Wales north coast.
“For me, the choice was easy because I have relatives living in and around Port Macquarie. Port Macquarie is a sea change area – it’s right on the beach,” he says.
By and large, the NSW property market is currently flat, so for the immediate term Salmon set his sights on generating a solid stable rental return while waiting for the market
“It’s four hours away from Sydney, so it’s a bit far for a weekender. I decided to rent the property out to a long-term tenant – generally if you want your place to be available for holiday rentals, it needs to be fully furnished and I didn’t have enough cash left over for that,” says Salmon.
Deciding to opt for a long-term tenant has also meant that Salmon didn’t need to spend a great deal on cosmetic repairs and maintenance. “It’s an older place – there are bills for standard wear and tear such as electricity and plumbing, but besides that there’s not too much upkeep. When I bought it, it was ready to rent,” says Salmon.
Significant growth in the Port Macquarie region has buoyed Salmon’s hopes that rents will follow an upward trajectory in the coming months. “Where I bought was actually in a satellite town of Port Macquarie. Enormous amounts of land are being opened up and people are looking to rent while their house is being built. So there is strong demand for rentals.”
Besides yield, Salmon is hoping that development on these land releases will soon translate into capital growth for existing homes in surrounding areas. “Lots of infrastructure is being put in the area to support the developments. There are now bigger retailers, hotels, pubs and more investment generally,”
As a first-home investor, Salmon found the local knowledge of friends and family invaluable in selecting a property. “Obviously, it helps to know people in the area – they can set you up with real estate agents, solicitors and other professionals who you can trust, and who can advise you along the way.”
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