Regional towns a budget property investment option but avoid one-industry mining towns: Monique Sasson Wakelin

Property investors with small budgets should consider investing in larger regional towns where prices are more affordable, but “avoid one-industry conurbations such as mining or resort towns” according to investment advisor Monique Sasson Wakelin.

In her latest blog post, Monique Sasson Wakelin says a regional town investment may be an option for prospective investors whose budgets don’t stretch to the $350,000 threshold that will buy “an entry level investment grade one bedroom apartment in an inner suburb of most of our capital cities, with a little more required in Melbourne and a fair amount more in Sydney”.

She says investors should consider regional cities that have a larger population and a diverse range of economic activity.

Sasson Wakelin says good regional options for budget-conscious investors are Newcastle and Wollongong in NSW and Geelong, Ballarat, and Bendigo in Victoria.

However, there are risks with investing in regional towns while the returns may not match those attainable in the bigger capital city markets.

“Be aware that due to the compromise in location, you are unlikely to attain the capital growth in a regional city that you can expect from the capital,” says Sasson Wakelin.

“The aim should therefore be to pay off debt quickly. With the acquired equity, you can then use this first property as a stepping stone into a capital city market.”

Investors should focus on property close to the town’s CBD, often within 1 kilometre of centre.

“A word of warning. It is much easier to pick a quality asset in a capital city than in a regional centre.

“Follow the fundamentals for inner suburban investment and the risk is low. An investment in a regional town is far more problematic,” she says.

Investors trying to weigh up whether to stick with the city or consider a more affordable regional investment option next year should sign up for Property Observer’s free webinar with Terry Ryder: Regions versus capital cities - where to invest in 2013? The webinar takes place on December 6 at 12.30.