Another where to buy. Brisbane vs. Sydney

Thanks Redom, that good to know. I'm currently with NAB and my mortgage broker has suggested that we max out our capacity with them before moving on to other lenders. What do you think?

I'd ask why.

With NAB being used early, you always need a good justification as it generally doesn't make sense from a structured investment lending point of view. They pay the highest trailing commissions and really support the broker business - it irks me seeing it if its just broker incentives. The only legitimate reasons why I can see it being used so early are:

1. Great valuation result that makes you go there over other lenders. I've got a few upside anomalies from NAB vals for some reason.

2. 90% no genuine savings requirement.

3. Servicing - you need to squeeze that last dollar out early. This is very marginal as their servicing calculator only really becomes powerful for those with larger portfolios.

4. Other niche reasons that they cater too.

I once mapped out the commission difference between NAB and another big4 over a 30 year mortgage (as an example) for a client - it ends up being massive.

Don't get me wrong, I use them a fair bit, but its for the specific reasons above (particularly genuine savings).

I wouldn't be 'tapping' out with NAB unless there's a specific reason to.

You could switch to another lender that takes the NAB debt you have at actual repayments (e.g. AMP, Macquarie, MEbank, Adelaide) and you should be able to extend your journey.

Cheers,
Redom
 
I'd ask why.

With NAB being used early, you always need a good justification as it generally doesn't make sense from a structured investment lending point of view. They pay the highest trailing commissions ........
I wouldn't be 'tapping' out with NAB unless there's a specific reason to.

You could switch to another lender that takes the NAB debt you have at actual repayments (e.g. AMP, Macquarie, MEbank, Adelaide) and you should be able to extend your journey.

Cheers,
Redom

Some good advice here, thank you :)
 
You mean see_change and moneyman 85 hype the Brissie market??? :rolleyes:

Plllease :(

Sorry to disappoint you wattleIdo but you won't see a lets hype Brisbane thread . The Sydney thread was an observing what was and is still going on in my own back yard and specifically done due to innuendos from various people that I was hyping the market.

Bought in Brisbane in 2013 and probably not as much growth as every one ( including myself ) was expecting , though anything we've bought in the last few years has been bought from a long term perspective , with any short term gain an added bonus . Interestingly the best performed one has been the OTP which gets finalised in the next few months . Close to 20 % up on that .

Currently just moved into our downsizer , so busy organising the house , then our youngest one has his 21 st planned as a welcome gift to all our new neighbours ......

Will be buying more this year . Gradually narrowing the field down at the moment , but I do have a short priced favourite ;) .

Maybe a lets hype .........middle of the year when I finished buying up the town and want to sell for a quick profit :eek: . Maybe I should talk to Gina to see if she wants to come in with me :rolleyes:

Cliff
 
The free Residex suburb reports include pie graphs, one of which is "Dwelling Type" that shows relative percentage of houses, semis and units.
 
I don't think Brisbane needs hyping right now. If your strategy is capital cities though, and despite some of the challenges Brisbane face right now (mentioned a couple of posts back in this thread); it is hard to see any cap city that is offering much better prospects for investors right now. Just in my humble opinion (and totally happy to be proven wrong as I am not armed with all the macroeconomic facts, per-city), but here's how I'd rate 8 x cap cities right now, on my personal real estate clock (12pm being peak, 6pm trough, 3pm cooling, 9pm rising).

I've also listed my own wildcard factor next to each. The wildcard might be an anecdote that is a caution or opportunity, regardless of the city's spot on the clock.

Again, I'm not armed with all the facts so I'm totally happy to be told I'm wrong! Still a learning/developing investor here!

Sydney - 12 o clock. Way too hot to touch. I'm avoiding it and many others as Cliff mentioned, are too. Like a Bondi spinster in her 50's with too much botox just done; she looks enticing from a distance but you get closer and the shine isn't so appealing..

Melbourne - 1.30. I think we've seen the peak but investors still avoiding as stock comes piling on to the market. This sassy girl wore the best dress of the night to the big parry and everyone has noticed in a good way. Problem is; the dress seemed like a uniqur designer Prada number, but turned out to be an off-the-rack generic Zara dress that many other girls turned up that night also wearing. And, the tag is still sticking out the dress.

Brisbane (and boldly.. The SEQ metro triangle including CG and SC..) - I'd argue around 7.30 which would present as an opportunity for many. But maybe its already around 9 or 10? Brizzi is the nice girl in the back of the classroom who gets good grades and doesn't really get into trouble. Once she left a biro pen in her uniform and it went through the wash, putting ink everywhere. People in class laughed for a couple of days but got over it. All the while she hasn't really paid attention to them and kept her mind on her studies.

Perth - 3 o clock. Most investors would say 'don't touch it!' But to others they say 'well.. One persons trash is another's treasure. Perth is a great singer and has a great voice. Instead of trying to get gigs and build a name for herself in the music industry, she went on one of those many reality TV singing contest shows. Sure, the crowds loved her and she won the damned season finale, but like all those song contest winners, when it came time for her to put out a solo album of her own songs, they all lacked any substance and she became yesterdays news, very quickly.

Adelaide - 7 o clock. Plenty of opportunity on the surface but are the macroeconomic drivers really there? After the auto loss And Olympic dam fallout, does Adelaide have a money-maker it can shake in people's faces? Not tempted. Adelaide is full of charisma, charm, and wit but she can still stand you up on a first, second or 17th date.

Canberra - 4 or 5 o clock. I personally have no experience in this market and whilst I don't discount investing there one day, for now I just don't see the appeal of a market so volatile on account of this increasingly frequent unstable governments. Canberra is a true politician; she's tough, hard to like; deceptive, and you mostly only pay attention to her for the things she doesn't do, versus the things she does do.

Hobart - 7 or 8 maybe? Apart from holidaying herr recently and learning the market; i dont have investing experence. The economy is still in a rough spot but their emerging tourism, foodie, and Baby Boomer retirement housing industry could pick things up again. Hobart is your friends lovely old grandmother who has been baking scones forever. Suddenly scones are 'on-trend' due to moronic hipsters bringing them back and Women's Weekly doing a 6-page special on them this month; making scones a trend again. But who knows how long Granny's prized scones will be coveted for until they fade back into the background again?

Darwin - 12 or 1? Already hot for ages, this market is likely at the peak and investors aren't touching it. Darwin is that obnoxious girl you met in a tour group on a European holiday. She's out of place, loud, and is clearly only there thanks to daddy's very large chequebook.

I thought this was a great post but has Melbourne really peaked? Thought prices still rising there, albeit a fair bit slower than Sydney. Thought Melbourne was around '10' with Sydney at '12'. I am looking at both Melbourne and Brisbane so keen to understand if members feel this is a poor time to be investing in Melbourne.

Cheers.
GG
 
Melbourne is a pretty fragmentedarket right now. Some suburbs are still on the up, others are overheated. Depends on what & where you are buying...
 
If your choosing btw Sydney and Brissy...it means you probably don't have a lot of cash/equity to buy both...so without going into your financial i would probably still suggest IF you have the ability to buy Sydney and fund /hold it...GO for Sydney it will have better CG over the long run- always has and always will.

CG = more cash/equity = ability to go again ( presuming you have serviceability)

Cash is king> CG> Equity> Serviceability.

Serviceability can be fixed...CG/equity not so much.
 
Michael...if you have $2m in property....you will probably need to calculate it based on 3.75% net return. So you will need about $2,666,667.

Why...because there are maintenance and other costs associated with property even after debt is paid off.

On Blue Chip shares, Fixed interest...the 4% or 25 times the income needed rule works quite well. So if you want 100k you will need 2.5m...that will keep up with inflation for life!

The other thing to consider is that a 100k net or pre-tax. If is pre-tax after taxes you will have about 75k! By splitting the income and buying properties with depreciation you could possibly only need 85k.

My net wealth is 64% property.and 26% cash.and the rest in super and shares..my plan is to change this mix over time to where I can reduce this to a 40-55% property and 45-60% shares and cash.

If the goal is $100k+ passive income. Then taking an approximate rental return of 5%, you would need $2,000,000 portfolio with no debt.

This could mean having 5 houses at $400,000 completely paid off or having $10mil portfolio at 80% lend to achieve this.

So moving forward, with each purchase whether it's in Sydney or Brisbane, calculate how this brings you closer to your goal. You can use different strategies to create equity or cashflow to get you closer too.

It's hard at the start but with each purchase this will become clearer and clearer.

Hope this helps.
Michael
 
The other thing to consider is that a 100k net or pre-tax. If is pre-tax after taxes you will have about 75k!.

A lot of property for not much income :s

I guess to increase the income, you need to continue to work on leveraging the existing equity and buying more etc
 
thanks mick c
so what u r saying is that if you were able to provide deposit for 2-3 properties now, u would buy in sydney now rather than brissie, if u consider long term capital gains.

Even despite where sydney is in the property cycle around 12pm compared to brissie maybe 7.30pm, u believe sydney will outstrip brissie long term

If so for this favourable growth, due u think houses will outstrip apartments for CG, or was this for both

And if u were to buy a few properties in sydney now, which location and what type be it houses or a parts would they b for high capital growth?

thanks
 
In terms of the property cycle, Sydney is now at peak, Brisbane is at around 7-8 o'clock. Might need to wait for the next cycle (maybe in a few years time) to kick in for CG if you buy in sydney now....although i think CG in long term is better for sydney

Let say for 600k budget, it will get you a 3/4 bedder house within the 15km ring of brisbane CBD, while you can only get a 2 bedder unit within 15km south of sydney CBD. with comparable rental return

At this point I will definitely go for house in brisbane rather than a unit in sydney due to the better potential CG in short term
 
My net wealth is 64% property.and 26% cash.and the rest in super and shares..my plan is to change this mix over time to where I can reduce this to a 40-55% property and 45-60% shares and cash.

Hi Sash

what do you do to reduce to 40-55% property and increase shares and cash to 45-60% ? (by selling down properties?)

if you do not mind, could I ask how long did it take for you to accumulate $2 million of net worth? (just want to get an idea of whether i am on the right track)

thanks again
 
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