The $250,000 homes in Mildura becoming more expensive: HTW

Finding homes in the $250,000 range is now impossible in Mildura, according to Herron Todd White’s July report.

The property investment firm says that it would be better to look for a complex of three or four residential units.

“When posed with this question in previous years, our recommendation has been to buy two houses, each at $250,000.

“However it is now almost impossible to find a reasonable standard home in Mildura for $250,000.

“Selling prices of 3-bedroom dwellings, especially those in a better part of town, are now starting at around $275,000, and so this strategy is now beyond our reach.

“For this year’s recommendation, we would suggest looking for a complex of most likely three or possibly four residential units.

“$500,000 should buy a complex built in the late 1980s or 1990s and of a reasonable standard.

“The main attraction will be the gross rental return of over 6%,” the report stated.

A three bedroom house at 5 Pearse Court, Mildura (above) has been listed for between $270,000 to $290,000.

A similar three bedroom house at 15 Kedmenec Drive, Mildura (below) has been listed for $274,435.

Factors such as living areas and car parking is important when looking for residential units Herron Todd White advises.

“The key is to find a complex which will be appealing to tenants, so look for reasonable size living areas and secure car parking, preferably in a west side or central location.

“The advantage of buying an entire complex rather than some units in a larger complex is the ability to control the management and co-ordinate any upgrading without the need to involve an Owners Corporation.

“Not only will this save money, it will also simplify management.

“In the past we have often observed that the downside of the higher rental return from unit complexes has been limited capital gain, however this seems to now be less significant, with recent sales showing that values of better standard complexes have increased at similar levels to detached dwellings.

“The higher interest in residential unit complexes is driven by buyers seeking consistent, annuity style returns.

“Some of these buyers would have historically focused on small commercial investment properties, however higher vacancy rates, particularly for commercial properties in the sub $500,000 price bracket, are a deterrent.

“Residential rents have also increased more rapidly than commercial units in the past few years,” the report advised.