$400,000

[MickInvestor]

I have $400,000 available and I want to buy an IP in SE QLD and I was wondering if you could help me?

If you had $400,000 available to spend on an IP in SE QLD:

1. What suburb would you buy in? and

2. What would you buy?

Any help/insight you are able to provide would be greatly appreciated?

 

[alexlee]

Do you mean you can borrow $400k, or you actually have $400k cash lying around?
Alex

 

[MickInvestor]

Do you mean you can borrow $400k, or you actually have $400k cash lying around?
Alex

Hi Alex - I can borrow $400k

 

[alexlee]

Then I'd ask: why max out with a $400k buy? How about a $300k buy? Or $250k?
Alex

 

[MickInvestor]

Then I'd ask: why max out with a $400k buy? How about a $300k buy? Or $250k?
Alex

Yep I completely agree Alex - the problem I am having at the moment is that I cannot decide whether to spend less and buy an IP a bit further from the CBD or spend more and get as close as possible and then my second problem is that I can't decide which suburb to buy in. I also think that house and land IP is better than units or townhouses but I thought Id throw the question out there to see what other peoples views are.

 

[sunshine]

I would buy a house here on the Sunny coast, but then I am biased

I expect you don't want to hear about areas up here, but are looking for places in Brisbane - unfortunately I am not knowledgable about Brisbane, so am no help at all.

Sunshine

 

[MickInvestor]

I would buy a house here on the Sunny coast, but then I am biased

I expect you don't want to hear about areas up here, but are looking for places in Brisbane - unfortunately I am not knowledgable about Brisbane, so am no help at all.

Sunshine

No I am open minded about my decision Sunshine - where would you suggest in particular on the Sunshine Coast?

Cheers

Mick

 

[stumunro]

Mick there are plenty of great suburbs to invest in! And i think the answer can come from yourself as to where abouts, think about yourself as an investor (as essentially you are taking on the risk it is much smarter for you to make complete decisions yourself) and where you want to invest. Take it as your education as to learning what types of investments you want to have, and then finding suburbs to match your criteria.

For Example your criteria might be based on the fact that you think there is a greater trend to convenience, such as proximity to shopping centres, transport, schools etc. So you would list out everything that you want to base your investments on

- Distance to CBD / Business centre
- Distances to major shopping centres
- Access to good public transport
- Amount of school in areas
- Amount of facilities in areas
- Changes to infrastructure & goverment funding

etc. etc.

You might think that as an investor you want to invest in properties with good areas of land that will in the future gentrify or increase in population so you might look for;

- Land over 1500sqm
- Outer suburbs with cheaper prices
- Places with statistics that show families are choosing to live rather than inner city

etc. etc.

There is no right or wrong answer as to your criteria, apart from that it should fit your core values and strategy as an investor.

As you have already worked out your budget it will help you cut down your shortlist of suburbs as to something you can afford.

Peoples opinions are important, but when you are talking about your success as an investor it's really important you educate yourself on the decision process on how to find good suburbs, otherwise you won't learn & progress as a good investor.

Also too I have found, especially on these forums, you get a much better response if you say to people, hey i've found this suburb called Chermside (for example) i like it for these reasons, do you guys have any opinions to further add as to my knowledge of this suburb.

GOOD LUCK!

 

[BayView]

I agree with Alex;

Why not look at buying 2 x $200k properties or cheaper, or buy one cheaper property, and keep some equity available in case of emergencies. In the current climate it is a good idea to keep your LVR at a lower level if possible. Less than 70% would be a good guide.

To buy 2 cheaper ones wil no doubt cut out some of the areas you are looking at, but this is a good hedge against vacancies, as it is unlikely that both will be vacant at the same time, you will hedge against low cap growth as well if you buy in different areas, and you can usuaully find a better rent return with the cheaper properties.

 

[alexlee]

Put it this way, it's likely you'll make some mistakes with your first one. Maybe you'll pay too much. Maybe there will be issues you're not aware of. That's fine: you'll learn a lot. I'd rather learn with a cheaper property than one that maxes out my loan limits and I can't buy anything more after that.
Alex

 

[stumunro]

I guess the balancing point to that, is what sort of property can he achieve with 200k matching his criteria. I completely agree with buying cheaper properties your first few goes, but I wouldn't stray from his strategy of the locality & type of properties he wants to purchase.

 

[skater]

Excellent advice from Stumunro. You really do need to do some research yourself. Find a couple of areas that you really like, then come back & ask for some opinions. You will get a much better response.

 

[MickInvestor]

Thanks for all the advice. It is definitely food for thought.

I guess it is tempting to want to tip all of my available funds into one basket (so to speak) in an attempt to get the best property closest to the CBD but at the same time it is my first IP and buying a cheaper property to learn the ropes makes alot of sense.

I have located two properties that I am seriously thinking about taking the plunge. I will set out some details below and any advice you might have would be greatly appreciated:

1. Oxley - 11kms from Brisbane CBD - $360,000 - around 580sqm - 3 bedrooms, 1 bathroom - currently tenanted at $300 per week - within walking distance to the train station and close to the main freeway - within walking distance to local shops.

2. Redbank Plains - 25kms from Brisbane CBD - $299,000 - 1200sqm - 3 bedrooms, 2 bathrooms - currently occupied by owner - close to shops - not close to a train station - close to schools.

 

[skater]

2. Redbank Plains - 25kms from Brisbane CBD - $299,000 - 1200sqm - 3 bedrooms, 2 bathrooms - currently occupied by owner - close to shops - not close to a train station - close to schools.

You haven't mentioned what the rental return will be like, or if it is sub-divideable. It's quite a good sized block, so it may have some good options.

 

[MickInvestor]

You haven't mentioned what the rental return will be like, or if it is sub-divideable. It's quite a good sized block, so it may have some good options.

Hi Skater - rent is around $240-$250 p/w and I am not sure if it is sub-divideable but assume it is not

Thanks

Mick

 

[stumunro]

I think both locations are great, if they are the same sort of house then i guess you are weighing up the main attributes, being;

double the land vs proximity to the cbd & better transport

so you have to weigh up whether the extra 500sqm is worth more or less than the extra 15km of travel. Is that distance going to make a difference to the future potential of each suburb?

Would also be a good idea to get the opinion of some of the locals in the area, and also do alot of research on the government sites about what is changing in the areas. You will get good growth in the short to medium term if there are any positive changes to infrastructure or amenities in the area.

I like to include the yield when i am weighing up properties, i tend to look for things around the 5% or more mark when looking near the city, further away i look for 5.5 - 6%. If it doesn't achieve this by the nominated purchase price & rent, i look to try and negotiate the price accordingly.

Also i would search both oxley and redbank plains in the search function of these forums, as there's a good chance both areas have been visited extensively in the past

Personally I like the locality of oxley, but there are lots and lots of factors you need to weigh up, including also the condition of the house, the depreciation if applicable, the required maintenance or renovations, the local zoning and also the statistical factors from abs, & government websites about info or changes etc.

GOOD LUCK.

 

[s_t]

Redbank plains is out in the sticks! Is subdivision potential worth anything in the outer fringe areas?

 

[MickInvestor]

I think both locations are great, if they are the same sort of house then i guess you are weighing up the main attributes, being;

double the land vs proximity to the cbd & better transport

so you have to weigh up whether the extra 500sqm is worth more or less than the extra 15km of travel. Is that distance going to make a difference to the future potential of each suburb?

Would also be a good idea to get the opinion of some of the locals in the area, and also do alot of research on the government sites about what is changing in the areas. You will get good growth in the short to medium term if there are any positive changes to infrastructure or amenities in the area.

I like to include the yield when i am weighing up properties, i tend to look for things around the 5% or more mark when looking near the city, further away i look for 5.5 - 6%. If it doesn't achieve this by the nominated purchase price & rent, i look to try and negotiate the price accordingly.

Also i would search both oxley and redbank plains in the search function of these forums, as there's a good chance both areas have been visited extensively in the past

Personally I like the locality of oxley, but there are lots and lots of factors you need to weigh up, including also the condition of the house, the depreciation if applicable, the required maintenance or renovations, the local zoning and also the statistical factors from abs, & government websites about info or changes etc.

GOOD LUCK.

Thanks Stumunro - that has been very helpful

 

[skater]

Redbank plains is out in the sticks! Is subdivision potential worth anything in the outer fringe areas?

It can be. Do some homework to find out. You might be able to move a second dwelling onto the property for minimal cost, which would give you a better yeild.

A word or warning. I don't know much about either area. I live in NSW & I don't have any QLD IP's. Just giving some ideas as to options that may be available.

 

[pi2012]

I have $400,000 available and I want to buy an IP in SE QLD and I was wondering if you could help me?

If you had $400,000 available to spend on an IP in SE QLD:

1. What suburb would you buy in? and

2. What would you buy?

Any help/insight you are able to provide would be greatly appreciated?

Not sure about SE QLD, if i had $400K to invest, i would have invest in Frankston South, Sunshine, Thornbury or Ivanhoe (in Vic).