If You Have a Small Deposit Should You Buy Regional or Wait?

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If you have a small deposit would you buy a regional property or would you wait and save a larger deposit to buy in a capital city?

Ryan: Okay, someone’s saying that they’ll soon have 40K. Would you use that as a deposit and buy regional and wait for the value to increase, or keep plugging away to buy better. I’ll be a first-time buyer and have three toddlers. It just depends on … well, I know Ben’s anti-regional.

But I think buying regional and waiting for the value to increase, that sounds risky to me. Like, if I was buying regional, I would want to be able to manufacture growth, or manufacture really good cash flow in a regional area to want to invest in there. I wouldn’t be investing in regional and just waiting for capital growth.

Ben: You don’t have to buy regional is you’ve 40K. You know, you could buy a high quality house for $300,000 in, you know, let’s call it Adelaide.

I don’t know anything about that market. I’m just throwing the name out there. You can probably do the same thing in Brisbane right now, if you know where you’re looking. Like high quality houses connected to the city. So, just because you don’t have a massive deposit, doesn’t mean that you can’t play in quality marketplaces with stronger long-term potential.

Ryan:    Yeah.

Ben: I guess epic stuff … I’ve bought like a couple properties in the last month for like $290,000 within 35 k’s of Brisbane [inaudible 00:01:14]. It’s just like there’s value around if you know where to look.

And yeah, the value there isn’t going to be … if you had 600K to play within 5 k’s of the city, you’re probably going to get a better capital gain. But, you know, if you’ve only got 300 grand to play with, which is you know, $30,000 deposit plus your closing costs, there’s still amazing opportunities around.

Ryan: Yeah.

Ben: Just because Sydney and Melbourne are so expensive, it’s just not a true reflection of the rest of the Australian market, which is completely affordable still.

Ryan: Yeah, what was the median price for houses in Sydney? It’s like over a million dollars or something now. It’s ridiculous.

Ben: It’s over 1.1 mill, man, like it’s insane. And the incomes haven’t risen-

Ryan: Yeah, it’s crazy.

Ben: … much.

Ryan:    Dude, I’m so glad I don’t still live in Sydney. I love [inaudible 00:02:00]. My affordable housing up here, like on the top of Sunshine Coast, so good man. I love it. But then we’re fortunate. We can work from wherever, ’cause we run our own businesses.

Hey guys, I hope that you enjoy the answer to this question, which came from my live Q & A episode with Ben on YouTube. We will be doing more of these in the future.

If you want to check out Ben then he is offering free strategy sessions to On Property listeners. To find out` more about that, go to onproperty.com.au\session and you can see all the details over there.

That’s it for today, and until next time, stay positive.

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