Best estate for CG and Cashflow in Brisbane and surrounds.

[ej89]

Hey guys,
One of my mates is in Brisbane this weekend and is looking to get a house and land package as an investment. Looking for 3-4 bedrooms and decent chance of CG with good cashflow. Less than 450k. I think there are a lot of bad areas with no chance of CG. Which would be the no go zones and which would be the better areas to invest in new builds?

He's been looking at Burpengary, Springfield Lakes, Yarabilba.
I know NorthLakes is quite popular but a bit pricier..

Sorry, I know most people aren't keen on H&L packages or building on this forum but figured i'd ask if you guys and girls know of any good estates in Brisbane and surrounds so I can pass it on to him. He does bot want established homes.

Thanks

 

[jerrybee]

I don't know if a HL package will give him what he wants. What's his obsession with new? He isn't living in it. I'd get anxiety attacks at the thought of renting out a brand spanking new house to someone who who may not care for it. I'd only buy new for my own PPOR.

 

[ej89]

I don't know if a HL package will give him what he wants. What's his obsession with new? He isn't living in it. I'd get anxiety attacks at the thought of renting out a brand spanking new house to someone who who may not care for it. I'd only buy new for my own PPOR.

I think he can't come up with the stamp duty funds immediately and he wants something he wont have to put too much money in for a while. E.g off the plan.

Haha I wouldn't be too worried about renting a new home as long as you've got insurance and the numbers work.

He also mentioned Burpengary and Morayfield too. I'm a little worried about potential oversupply in all these areas named and have advised to go established if possible. I don't mind springfield lakes and north lakes as much as the other ones

 

[Sailesh Channan]

Need to be careful as a lot of interstate investors a buying into cheap areas. Land developers are reporting that in some estates they are getting up to 70% investors.

This ratio will not be good for future capital growth.

I have reccomended some good areas to my clients lately.

 

[ej89]

Need to be careful as a lot of interstate investors a buying into cheap areas. Land developers are reporting that in some estates they are getting up to 70% investors.

This ratio will not be good for future capital growth.

I have reccomended some good areas to my clients lately.

Care to share which areas?

 

[Mark Coburn]

New?

New has many advantages over used, but if you really don't know what you are doing you can get burnt. But don't scared off by the doom and gloom crowd there is easy money to be made investing New.

• New has Stamp Duty on the Land only and not the house.
• New is easier to rent because tenants love renting new.
• New has less maintenance issues in the first 5 -10 years
• New tends to experience an uplift in value between the Land purchase and the build contract price when compared to the end valuation. We are getting 7-8% capital growth during the build stage on the current properties we are managing the build for with our clients.
• New has great depreciation in the first five years.

• New is built for the market at the time that market wants that product.
• We have watched all of our clients have a lot of success investing in New product.

There are dozens of historic examples of New areas doing extraordinary well.

 

[MIW]

Hey guys,
One of my mates is in Brisbane this weekend and is looking to get a house and land package as an investment. Looking for 3-4 bedrooms and decent chance of CG with good cashflow. Less than 450k. I think there are a lot of bad areas with no chance of CG. Which would be the no go zones and which would be the better areas to invest in new builds?

He's been looking at Burpengary, Springfield Lakes, Yarabilba.
I know NorthLakes is quite popular but a bit pricier..

Sorry, I know most people aren't keen on H&L packages or building on this forum but figured i'd ask if you guys and girls know of any good estates in Brisbane and surrounds so I can pass it on to him. He does bot want established homes.

Thanks

I have started out investing that way but would not do it now, because I have more knowledge and I wish to be in better, supply & demand areas, plus I like to manufacture equity with renovation potential too.
Think about it, the estates can only be developed where there's land available, right, so yes more supply than demand may impact CG in the long term.
Yes, agree with benefits over buying new vs old, but his can be manufactured through renovation or buying a new townhouse for example, or say 1 year old???
However, it really depends on your friends strategy, so best of luck!

 

[itxrd]

New has many advantages over used, but if you really don't know what you are doing you can get burnt. But don't scared off by the doom and gloom crowd there is easy money to be made investing New.

• New has Stamp Duty on the Land only and not the house.
• New is easier to rent because tenants love renting new.
• New has less maintenance issues in the first 5 -10 years
• New tends to experience an uplift in value between the Land purchase and the build contract price when compared to the end valuation. We are getting 7-8% capital growth during the build stage on the current properties we are managing the build for with our clients.
• New has great depreciation in the first five years.

• New is built for the market at the time that market wants that product.
• We have watched all of our clients have a lot of success investing in New product.

There are dozens of historic examples of New areas doing extraordinary well.

I think for a set and forget type of investor new is the way to go for the reasons above.

 

[devank]

I think for a set and forget type of investor new is the way to go for the reasons above.

Generally, these areas come with plenty of vacant lands. That alone kills any benefits of buying new house.

 

[LeoT]

New means your paying a premium and someone smarter than you made the money.

New doesn't allow you to buy under market value.

New doesn't allow scope for adding value.

New often means buying in areas of massive supply.

All those factors are killers of CG and generally make for poor investments, at least in the short to medium term and can greatly slow wealth creation.

Leo

 

[hugh72]

I think for a set and forget type of investor new is the way to go for the reasons above.

It can be good if its infill site, a block in an existing suburb. Probably better if new is the goal to buy near new but in superior locations. These properties will be lower maintenance with good depreciation still available IMO

 

[itxrd]

Generally, these areas come with plenty of vacant lands. That alone kills any benefits of buying new house.

Don't quite follow your explanation Devank. Do you mean like the Ponds in Sydney where I didn't buy 3 years ago and am now kicking myself?

New means your paying a premium and someone smarter than you made the money.

New doesn't allow you to buy under market value.

New doesn't allow scope for adding value.

New often means buying in areas of massive supply.

All those factors are killers of CG and generally make for poor investments, at least in the short to medium term and can greatly slow wealth creation.

Leo

Good points Leo. But to make the most of all of these factors = a lot of work. Some people don't have the time to research for months on here, look at tonnes of areas, analyse, do the renovations. Some just want to buy something in a growth area with infrastructure coming, claim depreciation, pick up the rent and forget about it.

I'm not saying thats the best way to go. But if you don't have time, its not bad

It can be good if its infill site, a block in an existing suburb. Probably better if new is the goal to buy near new but in superior locations. These properties will be lower maintenance with good depreciation still available IMO

Yup

 

[Azazel]

Don't quite follow your explanation Devank. Do you mean like the Ponds in Sydney where I didn't buy 3 years ago and am now kicking myself?

I'm guessing he means Brisbane, heaps of land, smaller population, slow population growth.
You could kick yourself for not buying anywhere in Sydney 3 years ago.

 

[devank]

I'm guessing he means Brisbane, heaps of land, smaller population, slow population growth.
You could kick yourself for not buying anywhere in Sydney 3 years ago.

Thanks Azazel

 

[LeoT]

Don't quite follow your explanation Devank. Do you mean like the Ponds in Sydney where I didn't buy 3 years ago and am now kicking myself?



Good points Leo. But to make the most of all of these factors = a lot of work. Some people don't have the time to research for months on here, look at tonnes of areas, analyse, do the renovations. Some just want to buy something in a growth area with infrastructure coming, claim depreciation, pick up the rent and forget about it.

I'm not saying thats the best way to go. But if you don't have time, its not bad

Yup

Hi Itxrd,

Yep I agree its not everyone's game. That's why I said in the short to medium term can greatly slow wealth creation. I'm sure a large segment of investors are happy with the slow boat to China method

Also by buying at the rough right time of a cycle and under market value and being able to add value addresses the part of being able to reduce risk in multiple ways.

cheers

Leo

 

[itxrd]

I'm guessing he means Brisbane, heaps of land, smaller population, slow population growth.
You could kick yourself for not buying anywhere in Sydney 3 years ago.

Ah now that makes more sense. Btw Ponds has gone up more than most areas. At the time everyone on here said it was a dumb idea investing there. All the new arguments like on this thread.

Maybe Brisbane is different to Sydney I don't know. Its the place to invest at the moment though as its pretty underpriced compared to Sydney. Lot of people are moving that way due to Sydney's unaffordability.

 

[itxrd]

Hi Itxrd,

Yep I agree its not everyone's game. That's why I said in the short to medium term can greatly slow wealth creation. I'm sure a large segment of investors are happy with the slow boat to China method

Also by buying at the rough right time of a cycle and under market value and being able to add value addresses the part of being able to reduce risk in multiple ways.

cheers

Leo

Agree completely Leo.

 

[ej89]

Ah now that makes more sense. Btw Ponds has gone up more than most areas. At the time everyone on here said it was a dumb idea investing there. All the new arguments like on this thread.

Maybe Brisbane is different to Sydney I don't know. Its the place to invest at the moment though as its pretty underpriced compared to Sydney. Lot of people are moving that way due to Sydney's unaffordability.

Just don't take the strategy here straight there if you're buying new I guess due to the fact that there is a lot of land and a lot of estates and not enough population growth to make it go crazy like in Sydney..

My friend ended up buying in Yarrabilba. 3 bedroom house for 307k renting at $380/week so the yield is there I guess. He says it's a 15-20 yr hold though

 

[MWDB]

Try not to buy an investment poperty in an estate. It is a horrid decision. Unless you are wooly, white and end your sentences in 'baa'.

 

[wombat777]

Focus on the fundamentals of location and amenity.

I backed away from buying a DHA mid-lease property in the Ipswich area since the numbers didn't stack up. Depreciation was respectable, however being in the extremity of an estate the property didn't have location and proximity to shops/schools/etc that would help with growth.