One thing that I always do when looking at any type of new property is to get the camera out and take a lot of photos. It’s great to have a visual reminder of what you’ve seen and with digital it’s also usefull to have dates that the photos were taken. This has been particularly handy when I look back over the time that this new build has been in the pipeline. Amazingly, sifting through photos reminded me that the very first steps on building from scratch were taken over 2 years ago in early 2013. It had been around 12 months since the last property purchase and that’s usually around the time that I start to get itchy feet and think about what the next step could be to expand the portfolio. As I mentioned in the last post there are a number of attractive options about buying off the plan and it was exciting to think about trying something new and learning about the construction process rather than simply another established property. So it was time to get out and see what options were available.
When an agent is marketing a new development they will often have lots of nice glossy brochures with lovely architectural drawings of brand new homes surrounded by lush landscaping and beautiful, well established trees. Whilst these pictures look nice, it’s important to see some real-life examples of similar projects. In January of 2013 I spotted a new project that looked promising and the agent was able to take me to view a similar project (by the same builder) just nearing completion. The new project designs were very similar to the one I was interested in and as you can see from the attached pictures it’s useful to be able to view the finished product from the outside as well as the finishes inside.
Having seen some examples of the finished product it was then time to go and view the proposed site of the development. One thing that is not uncommon in this area is to see older homes on massive blocks of land where the owner sells off the majority of their land to a developer and remains in their original house. This was what this proposed development was and unfortunately I’m just not a fan of it. You end up with a bunch of new homes sitting in what was the back yard of an older house and you have a narrow driveway going down the side to access the residences. Also, the old house in the front of this development wasn’t an architectural masterpiece and the actual location of the development was right on the edge of town. It just wasn’t quite what I was after. The quality of the properties, yes; the location and project layout, unfortunately not.
So although it was back to the drawing board (to an extent) it certainly wasn’t a waste of time. I had a good idea of what you could get for your money, the quality of the product and also what I was after as far as layout of a development.
Fast forward 10 months…
Landlordism 
Glenn what are your thoughts on diversifying to other areas? I notice most of your investments are in Ballarat. Why is that? Have you thought about other areas??
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Hi Bree, thanks for your comment. Yes, diversifying is important and you will see a lot of people write about it. I started in Ballarat because like a lot of people, it was what I knew and an area I was familiar with, making it easier to do my research. Fortunately Ballarat has proven good for the last 14 years and I have remained largely in that area. It’s a catch though as all areas go through cycles and as we’ve seen in examples such as mining towns, people that invested and were making a lot of money are now struggling as the major industry lessens. I’ve remained confident with Ballarat as it still has significant local industry (Mars confectionery, Haymes paints, Mcains, etc) as well as the university, significant infrastructure development (such as the hospital and cancer centre) and a steadily growing population. The vacancy rate has also remained low for a long duration keeping demand for rentals good. That being said, it’s sensible to not have all of your eggs in one basket and property in Frankston (on the outskirts of Melbourne for those not familiar with the area) was added to the portfolio in 2009 and that has also been ticking along nicely. Even though a very different area, Frankston has good transport links to the city, a university campus nearby and is on the beach (which is always good!). It also benefits from it’s location near to a capital city. The catch that is still there though is that of Victorian land tax. As land tax is state based it’s worth considering how this can impact on a portfolio. If all of the properties in the portfolio were scattered across different states land tax may not be an issue. Unfortunately as they are all in the same state the tax man comes after his share every 12 months. It’s worth considering the impact of land tax but I wouldn’t base any decisions on that fact alone. I hope that this provides some useful information Bree as to how things have progressed over the years!
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