2 down, more to go

Barracuda

Barracuda

IP #2 settles today - brand new 4 bed + study in Wakerley QLD, about 17Km from the Brisbane CBD towards Manly. The largest single level design in the estate. We signed the contract late last year - so far it has only cost us the deposit bond, but believe it has already gone up ~50K in value.

I inspected it on Tuesday and all looks great. It's a beautiful open plan home. The aircon, paving and blinds go in on Tuesday, with patio roof over the courtyard not long after, so should be ready for tenants by Thursday next week. Looks like we should obtain a rental yield of at least 5.5-6% (after factoring in the improvements). Plenty of interest and the going rent is now around at least $60-80 more than when we did the initial numbers last year. Woohoo!

May post some photo's this evening - here's a link with the incorrect address.... :rolleyes: http://www.realestate.com.au/cgi-bi...eader=&c=76327744&s=qld&snf=rbs&tm=1181274625

Planning's already starting for IP number 3, hopefully by the end of the year...

Cheers,
 
I would love to know what your costs are to buy/build this. $635 per week rent is a great bit of money coming in. Nice looking place too.

Wylie
 
Barracuda, well done and with that rental return it makes you think what some households must earn just to keep a roof over their heads, plus
normal day to day costs....
good luck willair..
 
wylie said:
I would love to know what your costs are to buy/build this. $635 per week rent is a great bit of money coming in. Nice looking place too.

Wylie
Click to expand...

We bought at 535000 last year - or more accurately, contracted to pay 535000 last year, choosing the property from there next release and having some modifications to the internal colour schemes and standard contract to suit us. I believe that other (smaller) designs are now selling in later releases for ~580000. It's a Mirvac property in the Mossvale at Manly estate.

The reason it deserves higher rent in the area is the design, as I say, is the largest single level design they have (improved over a similar design in the first release), and we're putting in fully ducted aircon, paving in the courtyard area and roofing over the courtyard to give a fully flowing outside living area (north facing backyard). We have positive interest at this rate and am hoping for a signing any day now.

We're really happy with the Mirvac build quality and the customer service - this is our 2nd Mirvac property (the other is here http://www.realestate.com.au/cgi-bi...&fmt=&header=&c=86057403&s=qld&tm=1181277907), and probably won't be our last. We achieved nearly 5% yield on our first, which is in a great area 4km's from the CBD, stroll to cafes, ferry, pubs and cinema and hope to achieve some good growth from valuations later in the year.

For us, the new quality properties work - the depreciation benefits and good rents mean the holding costs are very manageable, we hope to appeal to corporate or high value tenants, wish for low maintenance costs and are aiming for long-term solid CG.

Happy to admit that the guys at Navra helped us with both purchases and continue to support our plans on the next.

Cheers,
 
wow,

excuse my ignorance, the property looks nice enough, but i cant see $635/wk good value for money, Is Mossvale a new development?

i do know new developments in Melbourne with houses for rent at same distance (15-20km) from the CBD - rent at typically around 350/wk

heres a direct comparison:

http://www.realestate.com.au/cgi-bi...eader=&c=66887628&s=qld&snf=rbs&tm=1181279422

this one is looking for 640!

4 Franklin street now at 595, but it looks like most 4,2,2's around this region are going for around 350-400/wk

i think you might be a little overpriced,

but good on ya if you can manage to let at 635/wk

jaysus!
 
Hi jizzlobber,

The photo's don't do it justice. You really need to see them in 3D to appreciate the homes. They really are beautiful, very well designed, very high quality finishes. Note that although Manly is a fair way from the city, the airport is about 10 mins away and some of Brisbane's best private schools are in the area as well.

Mark
 
Thanks for that. The Love Street one looks terrific as well, more my cup of tea. I could live in that very easily. Would also love to hear the purchase price on that, if you are willing to share.

My interest is that we only have old houses. We have never dipped our toe in a new place. One queenslander we have at Coorparoo was last valued at $525K two years ago and is probably more like $550K or more now and while we are getting under market because of long term tenants (slowly creeping it up each six months though) I reckon rent should be $430 or so per week.

Considering the rent you are getting for the Wakerley house, and that house value is similar to our old queenslander (very good condition but only three bedrooms - one very tiny and one bathroom, huge deck and air-con to the living areas only) your rent is great.

Perhaps we should look at new next time (if there is a next time - we seem to have run out of funds).

Wylie
 
Mark Laszczuk said:
Hi jizzlobber,

The photo's don't do it justice. You really need to see them in 3D to appreciate the homes.

Mark
Click to expand...

Mark's right. There are a number of estates in the area and comparing values based upon number of beds / baths doesn't do them justice. We looked at other builder's homes being produced in the area and they do not compare - much smaller rooms, tight doorways and halls, lower spec finishes and smaller land. The Mirvac homes have consistently been acheiving significantly higher rentals in the area over the last couple of years for good reason. The same reason we get premium rent in Bulimba.

This particular home is significantly larger and different from the others available (with additional improvements on top of Mirvac's very good fitout) to justify a premium. You do highlight a good point though, the advertisement doesn't make this clear, and does not indicate that it is 4 (+ seperate study)/2/2 - I'll take that up with the agent.

In the end, the market will decide what its worth...

Cheers,
 
Barracuda said:
Mark's right. There are a number of estates in the area and comparing values based upon number of beds / baths doesn't do them justice. We looked at other builder's homes being produced in the area and they do not compare - much smaller rooms, tight doorways and halls, lower spec finishes and smaller land. The Mirvac homes have consistently been acheiving significantly higher rentals in the area over the last couple of years for good reason. The same reason we get premium rent in Bulimba.

This particular home is significantly larger and different from the others available (with additional improvements on top of Mirvac's very good fitout) to justify a premium. You do highlight a good point though, the advertisement doesn't make this clear, and does not indicate that it is 4 (+ seperate study)/2/2 - I'll take that up with the agent.

In the end, the market will decide what its worth...

Cheers,
Click to expand...


Hi Barracuda, yes, its very true the market decides, i suppose your agent should give you feedback from people that have looked at the property.

I know for myself as a tenant/renter, i would not choose paying an extra $250/wk, just because a property is a little bit nicer than the average or the finish is nice or the block is a little bit bigger than average, i would go for an okay 4 bedder that rents for 350 or 400 a week.

If you are looking for a high quality tenant, the first thing that pops into my head is: are they going to want 4 beds + study?, surely you are appealing to families and (large) families going by 4bed+study. Having 3 or 4 kids tends to concentrate the mind on minimising outgoings.
 
jizzlobber said:
Hi Barracuda, yes, its very true the market decides, i suppose your agent should give you feedback from people that have looked at the property.

I know for myself as a tenant/renter, i would not choose paying an extra $250/wk, just because a property is a little bit nicer than the average or the finish is nice or the block is a little bit bigger than average, i would go for an okay 4 bedder that rents for 350 or 400 a week.

If you are looking for a high quality tenant, the first thing that pops into my head is: are they going to want 4 beds + study?, surely you are appealing to families and (large) families going by 4bed+study. Having 3 or 4 kids tends to concentrate the mind on minimising outgoings.
Click to expand...

Feedback so far indicates we may have a tenant early next week.

Each to their own I guess - we're not looking to appeal to the 80% of tenants or to provide an 'ok' property - there are alot of people in that market already.
Nope - not necessarily looking for the 4 kid family to fill the rooms either.

My ideal tenant would be the 2 professionals with a small family who are working from home regularly who require a dedicated home office/s to keep work and family life seperate... Or the relocated professional who wants room for the family, a lovely open entertainer, close to private schools in a nice neighbourhood with similar neighbours, and for whom the company is willing to pay whatever necessary for their accomodation to keep him happy.

The reason for choosing the 4+ was that it is a unique design in the estate, giving much more room and affords us more flexibility for a small increase in purchase price and allows us to charge a premium for the right tenant. We also are happy to provide a high-spec fit-out that not all landlords do, to appeal to those who are looking for a bit more but have trouble finding it. We can compete on par with the 3+ home if we get desperate, yet can provide something extra for those who want / need it.

I'm confident of one thing, we will get significantly more rent than that which we did the initial numbers on last year when we decided to buy, meaning that we will be well ahead of our planned position.

Cheers,
 
Nice looking home. I can't believe people are paying that much to rent so far out of town. Any further than 15 mins drive from the city/gabba is Whoop Whoop to me ;) I guess some people prefer to live somewhere new further out rather than in an older house close to town.

You must be getting a nice bunch of depreciation on that though!
 
Barra,
Congratulations they are both nice places,
but don't you think you are moving a little too fast?
2 properties on the market at the same time and for such a high rent?
Anyway, I am sure you've done your homework.
I hope you rent them out quickly.
Good luck.
 
Last edited:
natmarie73 said:
Nice looking home. I can't believe people are paying that much to rent so far out of town. Any further than 15 mins drive from the city/gabba is Whoop Whoop to me ;) I guess some people prefer to live somewhere new further out rather than in an older house close to town.

You must be getting a nice bunch of depreciation on that though!
Click to expand...
Yeh it's interesting for me as well. That's a lot of rent.

I guess if there is a supply/demand imbalance in that bracket for rentals it would make sense, as Barra does make that point that they are looking for a different target market.

That's a fair chunk above the Brisbane median for purchase as well.. More of a 7 or 8 than a 6/10 I would guesstimate. I spend all my time looking at 3's and 4's so don't follow the upper market that closely.

The whole LOE model of buy this new stuff (6-8's) and depreciate to the ends of the earth makes me nervous, but that doesn't mean much as I'm a pretty nervous investor. Seems to have worked pretty well so far anyway with the 6-8's. I would be dusting off the history books to have a look at how this market area performed in the early 90's and other era's of stress though.

** edit ** One idea is that there is a genuine shift in wealth boundaries and the quality 'expensive' stuff will do relatively better than at times of downturn in the past

As long as your cashflow (job) is secure then anything can be weathered I would think.

Looks like an excellent house!
 
Last edited:
Wakerley is GOOD

Barra hi there we too bought in Wakerley recently and were surprised at the amount of rent we got. Not as much as yours but it rents for $430 a week which we are happy with. Its not that far from yours I dont think.

Its interesting about the rent as I live in WA and rent that much is fairly rare.

Good work

POB:)
 
BV said:
Barra,
Congratulations they are both nice places,
but don't you think you are moving a little too fast?
2 properties on the market at the same time and for such a high rent?
Anyway, I am sure you've done your homework.
I hope you rent them out quickly.
Good luck.
Click to expand...

Having 2 on the market is simply co-incidence. Our first (Bulimba) has been rented since the day after settlement last year for the rate shown. It is in a break lease situation at the moment, with the tenants (who have been great) giving plenty of notice to allow a good marketing period. We still have a lease until August on that property, which they will continue to pay until we get a replacement tenant - and they cover the leasing costs etc.

Like our new IP, the home we chose in Bulimba had 'unique' value above the majority in the area - it was at the end of a row, with a north facing entertaining area, no overshadow or neighbours in the view, so it is very open, light and airy. Its position is enviable - one block away (a short walk through the park) to the middle of Oxford st with its cafe lifestyle, pubs and cinema. At the end of the street is the river, with a riverside boardwalk to the ferry terminal. The rent is not extreme for the area.

We're really happy with our purchases and our returns to date. Our next will be of a similar quality I expect.

Cheers,
 
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