Buying PPOR NorthSide Brisbane <10km??

[eek]

Hey fellow forum dwellers,

I'll try and keep it short - I'm looking for a place to buy and live in, preferably within 10km from the CBD with good public transport options, since I work in the CBD, and fly quite often.

Spoken with bank and can easily pre-approve $550K or higher, but don't want to eat up serviceability too much on my single income. Looking for a quiet, peaceful freestanding house. Minimal gardens - I hate gardening. The plan would be to save up enough to turn it into an IP, leverage and purchase next property. It's just my wife and I, no kids, perhaps a dog-child, no kids planned for the future.

I wanted to look at places around Greenslopes, Holland Park and Woollongabba, since I've lived on the South side all my life,but they're waaaay out of my price range.

Been looking pretty closely at Kedron and Stafford at the moment - still a few houses in my price range. The cheaper places I can afford all appear to be 3x1x1 houses, on 400ish sq.m blocks and houses with identical floor plans - what's with that? ex. housing commission houses??

Couple of questions I have with the area:

• Kedron appears to be 'nicer' overall. Looking for places in the "Padua Precinct", west of Gympie Road. Has buses running through there and area just appears to be "nicer". Parts on the east of Gympie Rd seem cheaper, but are at risk of flooding as they're low lying areas?
  
  
• Stafford is cheaper, but heating up very very quick. Upon a bit of research it looks like nearly the entire street/area around Harold St is full of rental properties. I like it's proximity to Stafford City and relatively close walk to bus stops, but best of all, cheaper than Kedron - can put some money into renovations. Any downsides to this area? Ferals etc?
  
  
• 3x1x1 setup is fine for us, but we would prefer to have an extra toilet and bathroom and it doesn't seem like an easy task without losing a bedroom or needing to extend out the back. Either way, it will be an expensive exercise and I'm worried of over-capitalizing - more possibility of this happening in Stafford than Kedron?
  
  
• What are the thoughts on future growth? I can't see them doing too badly considering it's proximity to CBD, access to tunnels and busway etc? Are there good/bad areas to avoid in those suburbs?
  
  
• Are they housing commission properties? Police crime map shows it to be moderately busy. RPData reports on various properties show they're "value" quite a bit lower than the asking price. Could it be experiencing a sudden growth spurt that's not being reflected in RPData yet?

I work FIFO so don't get much time off on my roster. I've driven up there 2-3 times, and looked at a few properties already. Don't mind the area, though Gympie Rd. does get pretty busy and noisy at peak hour. Haven't been there at night time yet.

Would be good to hear some people's thoughts on the area. Will need to act fast, as prices keep rising and houses are selling like hotcakes to southern investors. Thanks.

 

[alexlee]

The plan would be to save up enough to turn it into an IP, leverage and purchase next property. It's just my wife and I, no kids, perhaps a dog-child, no kids planned for the future.

Can you explain why you think this strategy is better than, say, just keep renting and buying IPs from the start? You're a couple with no kids. You work FIFO. Do you really need a PPOR? A PPOR is likely to be more expensive than renting the equivalent place, since you don't get tax benefits and you pay all the expenses when owning.

You don't like gardening but like those areas? Rent a unit then. And buy whatever makes investment sense for an IP.

 

[eek]

Explain why you think this strategy is better than, say, just keep renting and buying IPs from the start.

Wife lives overseas, I live in a bedroom inside a share house....would prefer to have a house of our own and live in it together.

I do have 1 property that's tenanted, but will probably keep it that way. Occupancy rates are very good and acts as a good write off as I'm a few $K from the highest income tax bracket.

Would you say renting and purchasing IPs is more viable in the long run?

 

[alexlee]

Wife lives overseas, I live in a bedroom inside a share house....would prefer to have a house of our own and live in it together.

You want to live together, fine. Doesn't have to be a house you own. Go rent a townhouse with no gardens.

I do have 1 property that's tenanted, but will probably keep it that way. Occupancy rates are very good and acts as a good write off as I'm a few $K from the highest income tax bracket.

Great. So keep it as an IP.

Would you say renting and purchasing IPs is more viable in the long run?

You're making around 180k with no kids. You should be thinking bigger. Notice in your posts, you keep limiting yourself to 'the PPOR I'm going to buy' and 'this other place that I own'.

Generally, yes, buying IPs and renting is likely to be cheaper, especially as people who buy PPORs tend to overpay for them. In your situation, with a high income, few assets and no kids (yet), you should be focusing on building the asset base.

 

[eek]

You want to live together, fine. Doesn't have to be a house you own. Go rent a townhouse with no gardens.



Great. So keep it as an IP.



You're making around 180k with no kids. You should be thinking bigger. Notice in your posts, you keep limiting yourself to 'the PPOR I'm going to buy' and 'this other place that I own'.

Generally, yes, buying IPs and renting is likely to be cheaper, especially as people who buy PPORs tend to overpay for them. In your situation, with a high income, few assets and no kids (yet), you should be focusing on building the asset base.

Thanks Alexlee - I do need conditioning on the way I think - open to ideas!

Renting would tick all our boxes in terms of proximity to CBD and lifestyle (some pretty 'hip' in New Farm, Teneriffe, Newstead), however rent in those areas are pretty $$ even for 1 bedroom apartments.

The advantage would be reducing my non-deductible interest payments to 'zero' and only paying rent, utilities, etc. That way I will end up with more money in the bank at the end of the day, combined with my wages, I can keep saving to buy more IPs?

 

[alexlee]

Renting would tick all our boxes in terms of proximity to CBD and lifestyle (some pretty 'hip' in New Farm, Teneriffe, Newstead), however rent in those areas are pretty $$ even for 1 bedroom apartments.

It will be even more expensive to buy the same property.

The advantage would be reducing my non-deductible interest payments to 'zero' and only paying rent, utilities, etc. That way I will end up with more money in the bank at the end of the day, combined with my wages, I can keep saving to buy more IPs?

That's the financial reason. It's also to train yourself to look at property as numbers and investments, and not as the emotionally charged home. If you buy a couple of ips first, you're not going to keep thinking 'i need to be able to live here' because you have too many properties to live in anyway.