Buying IP in 2014 - am I on the right track?

Hi everyone, I am a first time property investor and have been reading this forum solidly for the past few days. Thanks to everyone who contributes, I have learned so much.

I would like your opinion on my current thoughts (which change all the time the more I read).

Our situation: PPoR is 5k from Perth, we have approx. $600,000 equity. Last year a property feel through, we were approved for $650,000 loan, but didn't proceed.

Income is $200K gross, plus I earn a bit part-time. Mortgage on PPoR is $2200 month.

No other loans, $10K limit on credit card.

Location:

Brisbane - I believe it is way undervalued, and my parents live there. I grew up in Brisbane and have seen massive change. Made my first $250K on property on Auchenflower ( sold well before it went under in 2011 floods :) Bought for $120,000 put in $80K raising and extending, a lot of hard yakka myself and sold for $455,000 5 years later. So, I know how to renovate ;)



Property thoughts:

Option 1:
Buy one decent house up to $450,000 and put $150K renos into it, including lift and build in under, and rent out as two residences. Potential areas - large block and three bed post-war in Carina or Stafford Heights.

Option 2:
Buy two cheapies - eg one in Zillmere and one somewhere else???

Thoughts behind suburb choice:

Stafford Heights and Zillmere due to location to Chermise and the development that will go on there.

Zillmere due to very cheap prices.

Carina - big blocks and on the way to Bayside, my parents are in their mid-70s and live on North Stradbroke Island - if we move back to Brisbane we can rent our PPoR in Perth and it will take care of itself (will rent for $650 week). Maybe eventually build in under so I can care for my parents in the long term.

I've gone from initially looking at a $495K 2 bed apartment in Newman returning $5200 month in rent, to getting totally scared of mining towns and regional centres (have already taken Mackay and Gladstone off the list after some research).

We have a fair bit of disposable income and can prop up rents, we're looking at long term capital gain, 10 years at least.

Though it makes no sense as I have two small children - I'd love to have a go at this one:

http://www.realestate.com.au/property-house-qld-everton park-115638431

*face palm*
 
Crazy prices here, and I thought I'd hedge my bets and have one property in brisbane and one in Perth. I have been looking at Girrawheen.

re Carina: this is under contract but this is close to what I am thinking of - I'd raise it, build in under, deck it front and back and make it look less like a Post war.

http://www.realestate.com.au/property-house-qld-carina-115528035

also this one, but it seems a bit high in price.

http://www.realestate.com.au/property-house-qld-carina+heights-115737295

this one went for $513K but is in infinitely better condition.

http://www.realestate.com.au/property-house-qld-carina+heights-115472171
 
Last edited:
Fair enough, but you seem to be contemplating all these different plans - but I can't see what the common goal is?

What is your overall investment strategy?
 
You see, that's the problem, I am just starting out and have no idea other than I want to buy an investment property for long term capital gains. If it happened to be Southside Brisbane then there's a secondary reason to own property there, my parents, and the Perth house will be the investment property.

Even a half million doesn't buy much in Perth unless you want to go to a suicide estate like Ellenbrook.
 
Perhaps do a forum search for "strategy" and read some of the more prominent threads that come on.

Its important to decide on exactly what you want to achieve with your property investing, and make sure it aligns well with your life goals.

For example, my goal is to cut down to working part-time as soon as possible, and I also don't mind renovating projects. Which has equated to me focusing on cashflow properties with renovation/subdivision/granny flat potential (manufactured growth - don't have time to buy and hold!).

I've also stuck to Perth for now since its easier for me to research areas, properties, planning regulations etc to get those good deals.

But obviously your situation is different from mine so you need to think about what you are trying to achieve and the timeframe you want to do it in.
 
Capital gains, to fund retirement eventually, as i don't think what we put away in superannuation now will give a decent income.

We're 47 now, had our kids late in life, so just starting now. We have only 20 good years of work, neither of us want to retire early, quite the opposite.
 
Just be aware that getting Council approval for dual living (i.e., renting to non-related separate families) is not as easy in Qld as in other states.

Don't necessarily believe a RE agent who tells you otherwise - go to the Council for accurate information.
Marg
 
Thanks Marg, I wasn't aware of that. In Perth there is no one central administration, there are groups of suburbs in local cities and all planning goes to the local city of your area, unlike Brisbane where you go to Brisbane City Council (unless you're in Redlands Shire or Pine Rivers Shire for e.g..) So rules for development are vastly different depending on your local city.
 
Dual Electric meter in Logan

Hi Marg, what if the house comes with dual electric meter? Is it easier to get Council approval for dual living from Logan than BCC with a separate dual electric meter?
 
Possible houses for you?

Option 1:
Buy one decent house up to $450,000 and put $150K renos into it, including lift and build in under, and rent out as two residences. Potential areas - large block and three bed post-war in Carina or Stafford Heights.

Option 2:
Buy two cheapies - eg one in Zillmere and one somewhere else???

Hi Tulamalula,

Seeing that your budget is 450K and you can put in 150K renos to lift and build in under, have you considered these houses in Rochedale South where you could possibly minimize your reno costs because downstairs has been built in already and maybe just needs lifting or an additional bathroom/toilet?

This one is legal height already but needs bathroom/toilet and maybe lounge room downstairs. Has huge garage and bedroom downstairs. West facing.
1.
http://www.realestate.com.au/property-house-qld-rochedale+south-115273723

This one has a huge rumpus/recreation room and a lounge set up downstairs with a wet bar. Needs just a bathroom/toilet and lifting to legal height
2.
http://www.realestate.com.au/property-house-qld-rochedale+south-115490159

Downstairs has its own bathroom, kitchenette and living area. All with separate access. Ceiling wall in upstairs lounge and kitchen looks made of asbestos. One side of house has short retaining walls. Needs lifting.
3.
http://www.realestate.com.au/property-house-qld-rochedale+south-115416751
 
Thanks for the links, I took a look it's too far out for me, and I'm really not familiar with the area. There is also not a lot of saving when you lift 3 metres or 3 inches, and there is cost in knocking out the bricks in some of those places and carting them away. It's a post war/ worker's cottage/Queenslander I'm looking for.
 
You see, that's the problem, I am just starting out and have no idea other than I want to buy an investment property for long term capital gains. If it happened to be Southside Brisbane then there's a secondary reason to own property there, my parents, and the Perth house will be the investment property.

Even a half million doesn't buy much in Perth unless you want to go to a suicide estate like Ellenbrook.

It's probably a good time to be looking at Brisbane :D

Would your Perth PPoR make a good IP?

Why is Ellenbrook a suicide estate?
 
Perth property would be positively geared as mortgage is small and rents in this area are sky high.


I call any new development with houses crammed on top of each other in an out of the way place a suicide estate because that's what I'd have to do if I ever found myslef living in one of them. Have you seen how close the houses are to each other?

Little boxes made of ticky tacky, little boxes all the same.
 
Perth property would be positively geared as mortgage is small and rents in this area are sky high.


I call any new development with houses crammed on top of each other in an out of the way place a suicide estate because that's what I'd have to do if I ever found myslef living in one of them. Have you seen how close the houses are to each other?

Little boxes made of ticky tacky, little boxes all the same.

thats wh7y i would not purchase anything in perth.I think it is overvalued- not worth what you get for the price.It has had a good 2013 but i think it will not be that great for 2014.
It is not a diverse economy; just inflated on the back of mining. Sooner or later it will come down or flatten. Sydney/Mel/Bris are all diverse economies and they have much greater staying power.

This is what im talking abouit:
http://www.realestate.com.au/property-apartment-wa-perth-114871003

its small size, dark interiors, directly in front and overlooking a petrol station, average quality and kitchen, high body corporate fees and asking a all too whopping 650k or so.
 
Last edited:
Jaguar, I totally agree, I'd say $450 is more realistic for that apartment. There is going to be a glut of inner-city apts, given the developments in East Perth and Elizabeth Quay.

Add to that inner city councils are letting people chop up blocks into the most tiny sizes, the average 600sqm block now has 3 houses on it. Everything is geared towards high density living. Rents are high due to mining boom. When I got here 8 years ago, there was a massive spike in prices, we actually paid $10K more than the asking price for our house just to secure it and not get into a bidding war with someone else. People expect those days to come back, but so many mining projects are no longer going ahead. (hubby is an engineer in oil and gas so I know what's happening in the industry)

At the end of the day, Perth is Perth, it's a big country town trying to be a city, and it's 5 hours flight from the rest of the country.

and it hardly ever rains and the soil is garbage :(
 
HI Beanie Girl

I have 5 out of those 7 on my saved list. The only 2 I don't like are on or close to main roads.

I also spotted a few in Kedron, slightly higher in price, but it's doable.

Aslong as I can lift, extend and build in under, I'm happy. Need to get onto council to see if I can rent out top and bottom as flats.
 
Cool!:) Keep Everton park, Everton Hill and McDowall in mind too.
They might turn up some gems, you never know.
I suppose places like Arana Hills, Ferny Grove are fat too west for you and Aspley too northernish?
 
Back
Top