Advice - Which type of property would you pick? Why?

If you had a choice, which would you consider a better investment option (looking at longer term), and why?

Firstly, distance will be within 12-20km range from Brisbane CBD, and all with simlar price range. Vacancy rates appear to be less than 2% all suburbs I'm considering. Am only looking at properties close to transport (pref. trains), shops, etc. (Loan will be IO, and about 95%LVR, if that is relevant to you)

What would you pick, in order, if everything else met your criteria? (these aren't specific properties, just cover the range of what I've been looking at)

  1. 3 bed Townhouse, 20+yr old, rental yeild about 5%
  2. 3 bed Townhouse, less than 10 year old, rental yeild 6% but one of the further out suburbs
  3. 3/4 bed House, 30+yr old (some reno, not necessarily very recent - I wouldn't reno), 4-5% rental yeild, further out suburb.
  4. 1 bed apartment, new, 5% yeild approx.

I have always preferred house and land for the land value CG, but its getting harder to afford for under $400K - and I'm wondering if a townhouse is a reasonable compromise? Smaller seems to be he way that development is going...on that note however, I am a bit mindful of the fact that particularly with the 1 bed units, whilst closer to the city and more potential CG, the market in those areas may be a bit flooded with stock (Nundah, Chermside for eg.), then again same with the townhouse developments that are happening a bit further out, although perhaps to a lesser degree (eg. Zillmere, Boondall), but Taigum has a lot!

A property with higher yeild will require less contribution by me to keep it, but then I want something that will at least give me some capital growth in the next couple of years so I get something towards equity for the next deposit.

I'd love to hear your thoughts...and if you know of any problem areas/types of property in the North Brisbane area, please let me know! Thanks :)
 
You can stay within 20km or 25km of Brisbane and get a yield of 6.5% on an existing house for well under $400k. So my pick would be option number 5.

I like repeating the mantra: Buildings depreciate, land appreciates. That's why I don't like townhouses or units.
 
Option 2 - newer townhouses are my preference for the following reasons (just bought one actually in bris, about to settle in 2 weeks)

- high depreciation helps the bottomline
- high rental yeild, again helps to reduce cost
- still has some land component so not unlimited supply like units

I subscribe to the mantra that profit will follow if you keep close eye on the cost :)

CG from market mentality (low to hot market) is probably at least 30% so I am okay letting go of the intrinsic land value appreciation of house on large blocks which require development to realise full potential
 
You can stay within 20km or 25km of Brisbane and get a yield of 6.5% on an existing house for well under $400k. So my pick would be option number 5.

I like repeating the mantra: Buildings depreciate, land appreciates. That's why I don't like townhouses or units.

Each to Their own.
Units can be good, but the margin for error is higher as quite a few conditions need to be true before serious gains can be achieved.
Comes down to strategy/risk/timeframe really
 
If you had a choice, which would you consider a better investment option (looking at longer term), and why?

Firstly, distance will be within 12-20km range from Brisbane CBD, and all with simlar price range. Vacancy rates appear to be less than 2% all suburbs I'm considering. Am only looking at properties close to transport (pref. trains), shops, etc. (Loan will be IO, and about 95%LVR, if that is relevant to you)

What would you pick, in order, if everything else met your criteria? (these aren't specific properties, just cover the range of what I've been looking at)

  1. 3 bed Townhouse, 20+yr old, rental yeild about 5%
  2. 3 bed Townhouse, less than 10 year old, rental yeild 6% but one of the further out suburbs
  3. 3/4 bed House, 30+yr old (some reno, not necessarily very recent - I wouldn't reno), 4-5% rental yeild, further out suburb.
  4. 1 bed apartment, new, 5% yeild approx.

I have always preferred house and land for the land value CG, but its getting harder to afford for under $400K - and I'm wondering if a townhouse is a reasonable compromise? Smaller seems to be he way that development is going...on that note however, I am a bit mindful of the fact that particularly with the 1 bed units, whilst closer to the city and more potential CG, the market in those areas may be a bit flooded with stock (Nundah, Chermside for eg.), then again same with the townhouse developments that are happening a bit further out, although perhaps to a lesser degree (eg. Zillmere, Boondall), but Taigum has a lot!

A property with higher yeild will require less contribution by me to keep it, but then I want something that will at least give me some capital growth in the next couple of years so I get something towards equity for the next deposit.

I'd love to hear your thoughts...and if you know of any problem areas/types of property in the North Brisbane area, please let me know! Thanks :)

Yyeah, to each their own and all that....

but for me, id personally prefer well located townhouses. Townhouses are generally, for the price point, closer to the CBD and do have some, although not much, land. They are not suspect to massive supply issues like apartments. Houses on large plots of land , assuming same price point, will either be far out or need major work to be done.
Townhouses are medium density living and are quite popular these days, as they are a mix of house and apartment.
 
You can stay within 20km or 25km of Brisbane and get a yield of 6.5% on an existing house for well under $400k. So my pick would be option number 5.

I like repeating the mantra: Buildings depreciate, land appreciates. That's why I don't like townhouses or units.

I didn't think there was an option 5. Agree with your choice. As the house is only 30 years old there shouldn't be too much maintenance. Second choice would be townhouse for the reasons already given. Apartments would be my last choice unless in a small complex.
 
You can stay within 20km or 25km of Brisbane and get a yield of 6.5% on an existing house for well under $400k. So my pick would be option number 5.

I like repeating the mantra: Buildings depreciate, land appreciates. That's why I don't like townhouses or units.

Price growth is dependant on supply and demand, not solely if it has land or not. The land component is a part of the supply demand equation, but not all of it.

Read:
http://propertyupdate.com.au/busting-apartment/
 
Back
Top