Tasmania Property Investment Strategy
Tasmania is a beautiful place, and many investors are in the mood.
The sentiment is that entry prices are affordable. This is, in fact, true for most areas excepting Hobart. Last month we traveled to the top of Tasmania and inspected 40 or more properties in the price range 135,000 – 250,000. What we discovered was quite astonishing.
In analyzing the property investment at an 80% lending ratio, the property all had a rent yield of between 5% and 14% – Making the whole strategy look very positive indeed. Most of the property we inspected, had been on the market for a while, the demand was quite high and in this budget, the buyer competition also fierce.
The way we do property contracts in Tasmania was very different to Melbourne in Victoria. There is no section 32 – it’s a wild card with the easements and other things we take for granted on a contract in Melbourne property transactions. You have to do you own digging, see councils, and water companies, or rely on the agent to help you out with the research.
The property management fees in Tasmania are very high – over 7.7% and around 9.9% on average. This took the ROI and the yield down on a property to just positively geared. It raised questions on the strategy overall and forced us to reconsider the deals we had in play. The capital growth figures in Tasmania, in certain areas, are a little shy. This was the greatest consideration on the Tasmania property investment strategy.
The Real Estate Institute of Tasmania (REIT) noted that housing affordability in the state has improved in recent months. We found that this statement is, in fact, true. Average rents along the top (Northern) towns / cities of Tassie are well below what we expect to pay in Melbourne.
Sales in the state have also slightly recovered, after falling 5.3 percent in the March quarter, with a 3.5 increase over the June quarter.
The REIT revealed the most affordable suburbs in the state and their median prices are:
- Zeehan – $55,000
- Queenstown– $62,000
- George Town – $123,000
- Clarendon Vale – $130,000
- Smithton – $133,500
- Ravenswood – $139,000
- Scottsdale – $144,000
- Gagebrook – $145,000
- Primrose Sands – $160,000
- Beauty Point – $162,500
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The Tasmanian landscape is incredibly beautiful. The Northern part of the state has much affordable property, the perfect place to buy a retirement home.
Recently I engaged property buyer group to assist me in purchasing investment property in Tasmania. Darren’s thoroughness in his preparation to this task was thankful, as I had numerous properties on my to buy list. Darren had prepared all the properties in order of efficiency for viewing and listed the advertised price , proposed buy price, rental and profit/loss yields. Darren’s approach to this somewhat daunting and a little overwhelming for me as a first time Investment buyer was welcomed. It enabled me to look realistically and with ease and confidence at these properties.The main point that has stuck with me since this trip to Tasmania was Darren’s honesty and the ability to ask me the questions that allowed me to be honest with myself.
The main point that has stuck with me since this trip to Tasmania was Darren’s honesty and the ability to ask me the questions that allowed me to be honest with myself.In the end I didn’t buy a property in Tasmania as the numbers just didn’t stack in my direction. I’m still on the look out though with Darren’s assistance. In the end I didn’t buy a property in Tasmania as the numbers just didn’t stack in my direction. I’m still on the look out though with Darren’s assistance.The excellent and
The excellent and non-invasive service that Darren offers is invaluable. I would highly recommend him to anyone in need of guidance through this difficult area of investing. A daunting task made considerably easier.