J & L BORG PTY LTD

ABN 32 021 189 660

Phone (02) 6568 3029
Fax (02) 6568 3029
Mobile 0415 554 385
Email: jjborg@bigpond.net.au

PO Box 211
Macksville NSW 2447

INVESTMENT OPPORTUNITY TO INCREASE YOUR WEALTH

Photo by Nick Frame Email: njframe@gmail.com

Investor Information

There are basic questions to ask in order to determine if this area is a good investment for someone building a property portfolio. These are some of the questions I know you would research:

1. What are vacancy rates and rental returns?

2. What is the projected capital growth?

3. Any possible problems with the new houses being constructed?

4. What is the local infrastructure?

The answers to these questions below will indicate that this area is a great opportunity to increase your wealth through property investment.

1: Demand

Our Information Pack  gives you a market appraisal from a local agent in Macksville about rental demand.

If you want to understand what is happening in our market then I suggest a great place to start would be Danny Whalen of Raine and Horne in Macksville.

There are also no properties available for rent in the town or the wider area. When a property is listed it is taken the same day. There is a higher demand for 4BR homes, although any home is rented immediately.

2: Rental Return

A couple of the 4BR designs can be constructed for around $150,000 completely finished including site costs, turf and fences. Add this to the price of the land ($130,000) and you can purchase brand new 4 bedroom house on a generous sized block for just $280,000.

The rent is between $240 - $260 per week. I think this is easily attainable in this climate. So the return is just under 5% and with rents going up now after the huge hike in capital growth over the past three years.

Our Information Pack will also give you an idea of the recent and future capital growth in the town and whole Shire:

• Local council estimates population growth of 3% pa over the last three years based on occupancy certificates. The average predicted growth for the whole North Coast over the next 20 years is 2.5% pa (a chart sourced from NRMA).

• Greg Meyers, the Director of Environment and Community Planning, at the local council expects rapid population growth over the next 10 years. There is widespread development activity under way in the Shire and the rate of increase in occupancy certificates is currently increasing.

• Our information pack also provides recent comparative sales in Macksville (source - RP Data). I explain their importance in establishing the pattern of recent capital growth in Macksville. It is easy to see hat my land and house packages have equity already built in at these purchase prices.

• One of the best sources of information on growth in the Shire is the Development Officer at the local council, Wayne Lowe. Interested parties might like to ring him and pick his brains. They could mention their interest through me. Wayne can be contacted on ph: (02) 6568 0226 and 0417 271 218.

• I am aware that 25% of the NSW workforce will retire over the next four years and many are interested to explore the concept of ‘sea-change’.

 
3: Builder Credentials

The builder is Cavalier Homes who has an excellent reputation in the area. They are locally acknowledged as NSW north coasts fastest growing builder and currently one of the areas largest builders with annual turnover of approx. $11.5 million. The foundation for this achievement is their commitment to total client satisfaction reflected in the high number of repeat clients (particularly large investors).

Their emphasis on customer satisfaction, combined with affordability, quality of product and the ability to offer custom design services (Integrity New Homes) makes Cavalier Homes a natural choice as the preferred builder for our estate.

Cavalier Homes provides a high level of supervision and quality in their homes, while their strong management ensures homes are finished on time. Their reputation for quality of workmanship, management and customer satisfaction contributed to Cavalier Homes being named as franchise of the year for 2003 amongst a field of 50 franchise builders.

4: Future Centre

The great attraction of Macksville is the rural setting of the town on the Nambucca River and within 10mins drive from magnificent beaches.

The town has its own high school, primary schools, hospital, ambulance, fire brigade, sporting grounds, football teams, other sporting groups, supermarket, department store, hardware store, etc, etc. Also Woolworths discount supermarket and specialty shops are being placed on a site in the town. Woolworths has completed its own market research and it has chosen Macksville as its centre in the Shire because the local Council is establishing Macksville as the future commercial centre of the Shire.

My Own Conclusions

1. It is certain that this is a growth area. Strong capital growth can be expected again. Even if capital growth was only 10% pa property prices would double in seven years. Therefore, it is likely that property prices here will double in less than seven years.

2. Rental demand is very high and rents are going up after the huge hike in capital value.

3. There is little likelihood of trouble with the builder, Cavalier Homes (see cover letter in folder).

4. In the above scenario it doesn’t matter when you buy in the cycle if you hold for at least 7 years. The value of the property will double. The rents are going up and the property will become positively geared in the short term.

5. Vendor transfer duty in NSW is now removed.. The threshold for land tax in NSW has been re-introduced. Any land tax liability is offset in this town by increasing rents.

If I can be of further assistance in supplying information please do not hesitate to contact me.

Sincerely,

Jeff Borg
Director
J&L Borg Pty Ltd