A home in New South Wales is on sale for less than $40,000, about 20 times cheaper than the average asking price in Sydney. For this small sum, you can own a two-bedroom house with a garage and a backyard – however, there is a catch.
Frugal rural homes
The house is located in Broken Hill, 1000 km west of Sydney and in a town surrounded by a desert. Though not for the buyer taken with the urban lifestyle, one with a rural disposition could find themselves living the Australian Dream at little expense.
Where these homes seem most attractive, however, is in the opportunity for investment. “This house is a renovator’s delight,” said Cliff Wren from Broken Hill Real Estate, speaking about a single storey property on the market with a mere $45,000 asking price.
“Prices are so reasonable in Broken Hill because the underlying land value is cheap as chips; we don’t have any rivers or beaches to push the value up,” Wren said.
“Investors just swarm at these houses under $100,000. They tart it up, make it liveable and then rent it out to a nurse for a couple of years.”
The problems versus the profits
For investor and prospective resident alike, the downsides of the location are undeniable – there is only one train each week, a 300 km journey to the nearest K-mart or Big W, and the local wildlife to contend with.
However, the rental scheme proposed by Wren is attractive all the same, for those struggling to purchase urban property. Wren suggests going to a regional centre, buying a $40,000 property, spending about $15,000 to make it liveable, and selling it for about $85,000 to $90,000 – for a substantial return.
Additionally, it should be noted that the rental market is currently strong, especially in regional centres. Broken Hill is host to much traffic from the public sector and mining industry.
To renovate, rent out or simply live in, these sub-$40,000 prices represent a glowing opportunity for those struggling to break into the real estate market.