advice needed on first investment property

Discussion in 'Where to Buy' started by Eks, 17th Jun, 2015.

  1. Eks

    Eks Member

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    Hi there,

    I am looking for some advice. I am at a stage where I am ready to invest in my first investment property, I?ve spent a bit of time reading books and checking this forum for days on end.

    However I am still very confused as to the exactly area I want to be purchasing in.

    I am currently thinking Brisbane, I have come up with this as I think Sydney is already at a peak so buying right now might mean that I limit my capital growth, until it booms again, or it might just bust. Melbourne is following suit, however still some potential in the western suburb, Brisbane has definitely not seen that much capital growth in a VERY VERY long time, so maybe I buy now in the hopes of it growing in the next 5-10 years. Im planning on a buy and hold model so I do want something that is low cost and low risk.

    I am familiar with all those 3 areas, lived in Sydney before moving to Brisbane (where I grew up) and am currently now living in Melbourne.

    So I have concluded Brisbane. My budget is tiny in comparison to some of your budgets. Maybe 300- 350K. I don?t want to invest too much for my first property, keen to have a low risk/low cost profile. The suburbs I have narrowed it down are as follows and all have reasonably low vacancy rates:

    3 bedder houses in Woodridge or Beenleigh; or
    2 bedder units in inner city (Annerley, Albion, Cooporoo)

    (note I grew up south of Brisbane the area I know best)

    I have considered some suburbs like Melton south (which I note not a lot of you have been fans of), Werribee, Hoppers crossing in Melbourne too.

    Any advice on my approach would be highly appreciated!
     
  2. Rixter

    Rixter $uper Investor (Retired)

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    I take it you're after CG...as such have you thought about villas/townhouses in or adjacent to a satellite CBD somewhere around the Brisbane southside? These are the CG hubs.
     
  3. doozer

    doozer Member

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    The trick with the first one is to buy something hassle free. If your budget is $300-350k and you're looking at Annerley, Coorparoo etc then you're limiting yourself to a run down unit probably needing constant repairs. If I was you I'd look at areas like Kallangur or even Burpengary. Newer 3 bed units available which means reasonable yield, reasonable tax depreciation and steady CG over time. Also means much less money spent on repairs and related headaches.
     
  4. JohnHenry

    JohnHenry Mister

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    Hi Mate,


    I've read through and offered some H&L package in Park Ridge, QLD it is 30 minutes drive to Brisbane CBD (28km from Brisbane CBD) and mostly H&L package is under $400k and starting from $280k. There will be a huge development in the area.

    here's some more information:

    Complete_Builders_Packages.pdf - 12.8 MB
    Park_Ridge_Urbis_Report_(HR).pdf - 3.2 MB
    The_Rise_E-brochure.pdf - 3.7 MB
    The_Rise_Stage_Plan.pdf - 1.3 MB
     
  5. Peter_Tersteeg

    Peter_Tersteeg Finance broker/strategist

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    "Huge development" is not a selling point, it's a reason to avoid the area.
     
  6. JohnHenry

    JohnHenry Mister

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    Why is that Peter ?
    isn't that sign of gentrification ?

    At least this is not an OTP apartment in Brisbane CBD which is over supplied.
     
  7. LeoT

    LeoT Member

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    Depends what the huge development is but basically the influx of new stock (especially if massive stock like you indicated) can cause an imbalance in supply and demand for an area for a period of time, therefore limiting growth potential for that period, IMO.
     
  8. Tyrones

    Tyrones Member

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    Hi Eks,

    Have you considered the Logan central area? I've been reading up from other SS members that would be a good area to invest into. It's a little further out from Brisbane and since it's within your price range of $300k - $350k it may be worthwhile to look into. In addition, you may find some of the rental yields quite reasonable that may just cover / breakeven with holding your property. Here's a discussion that's been going on inside the forum:
    http://somersoft.com/forums/showthread.php?t=80605&highlight=logan+central&page=3

    I'm personally looking to buy in this area as well, as I have that budget as well.

    Hope that helps.

    Thanks
     
  9. Eks

    Eks Member

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    Hi, yes I'm after CG but I also want a reasonable return. By satellite towns do you mean mt gravatt/eight miles planes? I think the properties there are above my price range. I'm open to suggestions of course.
     
  10. Eks

    Eks Member

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    I agree with hassle free, will look into the suburbs you mentioned. Thank you
     
  11. Bran

    Bran Member

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    JohnHenry,

    I'm confused with your posts. In the other thread, you state this: "Because so far, I'm not a big fan of OTP or brand new IP due to the overstock risk."

    Furthermore, I doubt you can get from Park Ridge to the CBD in 30 minutes, at any time you would reasonably wish to get there. Oh, and Park Ridge High School.
     
  12. jpcashflow

    jpcashflow Member

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    Hi

    Hi,

    The most important thing is to "do" and "learn" your first investment property
    is going to be your foundation and learning point. What you do wrong in this property can help you learn for future investments.

    The biggest thing I see, is when a person is trying to buy their first IP they are trying to look for the perfect property. Be time they do this, they usually loose out or not do anything.

    Have a budget and the most important thing to ask your self what are you trying to achieve out of this property?
     
  13. oc1

    oc1 Developer

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    What????????
     
  14. Rixter

    Rixter $uper Investor (Retired)

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    Yeah, upper mt gravatt, carindale, etc.....look to where the big shopping towns like westfields are.
     
  15. JohnHenry

    JohnHenry Mister

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    Bran,

    I'm not living in Brisbane area so I don't know how long does it take from Park Ridge to CBD.

    Anyhow, with my statement regarding OTP was for OTP apartment, this time it is different, due to Park Ridge is H&L package. Land Appreciate, Building Depreciate hence I begin to understand the benefits of investing H&L package instead of apartment.
     
  16. Bran

    Bran Member

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    The vacant and developable land from Park Ridge extends west through Jimboomba, pretty much all the way to Charleville. The area is akin to the development at yarrabilba (did you post on that one as well)? I wouldn't touch either.

    The only H and L that has seemed worth considering is the North Lakes stuff, but I take what I hear with a grain of salt, I have done no DD, I don't know how far it is from the CBD, and thus I won't be recommending it to anyone.

    Good luck with your search OP and JH.
     
    JohnHenry likes this.
  17. JohnHenry

    JohnHenry Mister

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    Many thanks for the clarification and comments Bran. Since I'm not living in the Brisbane area I wouldn't know about this.

    Initially I didn't believe in the Brisbane OTP apartment due to the over supply issue or maybe poor quality build, but in this instance it is House so it has a land component which is appreciating over the time.

    Therefore as you said, I shouldn't be worrying about buying in Park Ridge.

    Thanks man.
     
  18. Propertynewby

    Propertynewby Member

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    Rixter, ive seen you mention "satellite CBD' a few times and give examples, however, what does it actually mean?

    Do you mean the geographical centere of the city? for example, Parramatta of Sydney?

    Would love some clarification on this as im certain your advice is worth taking!
     
  19. Rixter

    Rixter $uper Investor (Retired)

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    Satellite CBD's are suburban hubs scattered around metropolitan areas of state capitals.

    Areas containing good supporting infrastructure with main arterial roads in/out of the suburb, with public transport hubs, high employment, major shopping precincts, good educational, medical & recreational facilities..

    All the things people want to be located close by to and/or within easy commute. This bolsters the demand side of the supply/demand equation which in turn puts upward pressure on asking prices.

    Yes Parramatta in Sydney's metro area is an example of one. As mentioned, some examples in Brisbane's southside are Upper Mt Gravatt, Carindale, Sunnybank etc

    In 40-50 years gone by it used to be where you were located in proximity to the Capital City CBD. Due to population growth and urban sprawl the metropolitan has increased size dramatically.

    Now we have satellite CBD's emerging & scattered around metro areas the need to be located close by to the Capital City CBD is not as vital.

    The demand now days is for areas in close proximity to these satellite cbd's instead to facilitate peoples work, rest & play.

    I hope this helps.
     
    Last edited: 18th Jun, 2015
    JohnHenry likes this.
  20. jerryparker

    jerryparker Member

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    Eks,

    After 25 years in property development and investing, I help people get into investment properties and build portfolios for long term wealth creation. I am also licensed.

    The property clock has moved to Brisbane as prices a re quite low compared to Sydney and Melbourne. Also interest rates will probably head lower and make it even easier to actually own property.

    If you pay taxes you are better getting the quicker depreciation benefits from a new property. There a lot to choose from. Your price range is going to limit you to 1 bedroom Apts or Townhouses. Again there are a lot of those for sale as well.

    If you have decided that you are going to be a passive investor who wants to enjoy tax deferred capital gains. Then location is your most important consideration at this stage.

    Most of my time is spent analysing developments and the location. I spend a lot of time on the research, demographics, and infrastructure around developments that drive potential price increases. Then look at the particular properties aspects...# bedroom, # car parks, aspect, walking distance to school, distance from highway, view.

    Two important aspects are rentability for cash flow, and scarcity for capital growth.

    Your $300k-$350k budget is tight. It would be good to know you taxable income, Townhouses in outer suburbs near train stations, or 1 bedroom inner city...you can get 2 year rental guarantees and furniture packages by pushing developers who are worried about an over supply. In my view there will be an over supply in the rental market, but prices are heading higher anyway.

    Feel free to PM me if you want some serious assistance.

    Cheers,

    Jerry