Getting passionate about property is easy but getting it right is trickier

By the time the mass-selling magazine publications hit the newsagency, locations that have a red-hot reputation have most likely passed their invest-by date – or at least are getting close to over satuaration by those who have gotten in before the tipster following herd.

Picking and purchasing property gems before they have got theirshine is the wisest strategy,which Residex forecaster John Edwards says involves buying at the right price, in the right place and at the right time.

Investors shouldn’t totally ignore the magazine tipsters, but sensibly should be seeking out individual property that represents good buying value, whereever it’s located.

Finding the property that suits your portfolio aided by insights from mentors.

These magazine hotspot lists are all too often way too cursory – they ought to be read and filed in your burgeoning library of research data, as they will be a handy resource and reference book, a template for starting the research, but I wouldn’t use them as a call to action.

Much of the current hotspots buzz centres on mining towns.

And there’s no better example of the hotspotting herd getting it terribly wrong than Zeehan, the picturesque small west coast Tasmanian town with a population of around 850.

It had significant speculative investment from 2003 to 2008, largely driven by mainlanders seeking dwellings with good rental returns at the cheapest end of the national market.

The investor demand had been driven by a number of exposés of the town promoting it as a hotspot.

Things really took off after a 2006 segment on Channel 9’s A Current Affair highlighted the town as the cheapest for housing in Australia.

Prices that were around $10,000 in the early 2000s jumped to $80,000 after the ACA story and then went as high as $150,000, even $190,000 in one sale, at the time of the Avebury nickel mine opening.

They’re now back to $100,000, according to a recent Australian Housing and Urban Research Institute (AHURI) study by Professor Andrew Beer.

While the June 2008 opening of the mine assisted prices along, the mothballing of the mine just six months later in December 2008 – and the loss of almost 200 jobs – has since caused house prices to plummet dramatically.

In its wake there’s been a procession of residential investors defaulting on their mortgages and business closures all too common.

Currently, Zeehan’s housing market is described as depressed by Beer and unlikely to recover from this position until the Avebury mine reopens.

A quick search of recent sale around Zeehan didn't take long before Property Observer uncovered one cottage sold at $147,500 in 2007 that resold this year at $66,000. It had been a much speculated property selling for $20,000 in 2004, at $13,000 in 2002 and at $7,000 in 2002, according to RP Data. Nearby a vacant building block that fetched $33,000 in 2007 sold for $5,250 earlier this year.