CF+ regions - Logan V Ipswich V Other Brisbane V Any other suggestion

Part of my strategy for my next investment is acquiring a cf+ property and holding to overcome my issues with my current plans which is loan serviceability.

Pretty much only interested in extremely large town or capital cities.
Based in Sydney, Brisbane is preferable as travelling there is easy and love to visit QLD whenever I can.

Looking in brisbane i find it near impossible to have cf+ properties after considering outgoings but with a auxiliary building there is a possibility.

From what i can see Ispwich Council allows granny flats to be rented individually. Ipswich seems to be quiet ideal with 6-8% yield possibility. Only thing that concerns me is the economy of the area, supply of new housing in newer estates and flooding.

My plan would be to stay nearer to the Ipswich itself somewhere near east ipswich, north booval or bundamba train stations.

North/Booval seems to have some nice properties (especially in north with some brick 4/2/2 going for low prices with high yield).

Would anyone be able to tell me any concerns i should have about the area (am planning on going and visiting the area prior to buying but not yet)

Also with flood affected properties what would the issues be as an investor? (Higher insurance premiums etc)


The other region i have been looking at actively is Kingston and Slacks creeks. Only issues here is I would have to wait until the new planning comes out to build a granny flat and the yield seems to be a bit lower although i feel like these area have better cg potential.

Any other areas please feel free to post up your opinion
 
Looking in brisbane i find it near impossible to have cf+ properties after considering outgoings but with a auxiliary building there is a possibility.

Hi Gach2,

Interested to hear what properties you have been looking at?

Around the areas where you have been looking (Ipswich & Logan), it's possible to get neutral/cashflow positive properties without auxiliary units. You generally need 6.5-7% to be cashflow neutral.

I haven't looked at Ipswich closely so won't comment too much. The yields are better, prices are lower but you have more land around Ipswich so I feel the capital growth may be limited - hard to say, depends on the deal itself.

On Logan, if you look for highsets then the yield tends to be better. At the moment I have seen quite a bit of investor activity in Kingston, Woodridge, Logan Central & Slacks Creek. If you move a bit further to areas like Crestmead, Marsden, Bethania, Waterford West, Beenleigh etc you will find it isn't as hot.

Also the $250-300k has lots of competition so I've been looking a bit higher, less competition and you can actually get more value for money.

Hope this helps,
Michael
 
I don't know about now, but I did have a similar decision to make about a year ago.
Even though Ipswich had the slightly better yields at the time, I decided to go with Logan, as I can see that with the Gold Coast and Brisbane growing, Logan is going to be well placed.
However, as there is still a lot of land around Brisbane, I don't see all that much benefit for Ipswich.
 
Hi Gach2,

This is a very interesting post.

Michael is definitely one of the experts in Logan area. I have visited the area some times this year. and just like Michael said the competition at lower end is very strong.

Last week, I had a very interesting conversation with a private town planning consultant about Ipswich area. and I found Ipswich has some similarity to Logan area in terms of urban renewal. I did a bit of research on Ipswich and found the yield is slightly higher than Logan area in general.

Could it be Logan moves first than Ipswich follows ? Certainly interesting to watch closely on both areas.
 
Spent the weekend in Qld, visiting Logan and Ipswich and saw some quite lovely homes in Ipswich with yields around 6.5%. I don't really see the need for dual occ in Ipswich as there are lots of rentals available so why would tenants chose to share a property.

Also, found residents of Ipswich somewhat different from the Logan locals as Logan is quite a melting pot of migrants, refugees etc. The rea who's lived in Ipswich all her life said she loved it there and wouldn't ever move. I must say Ipswich does have a nice relaxed country feel to it.

On the whole, even the traffic is so much less in Brissy as compared in Sydney.

Could it be Logan moves first than Ipswich follows ? Certainly interesting to watch closely on both areas.

Let's hope this is true as would like to see the flow on effects from Logan into Ipswich.
 
Thanks for the replies

Michael - saw your replies from a few weeks ago (maybe 2 months) since i posted questions on Logan and don't get me wrong I am quiet interested in Logan and if the right property comes up will go for it.

Definately see more potential in Logan than Ipswich in CG wise but with the proposed planning scheme taking its time im more looking at Ipswich as with both areas i cannot see positive geared properties (if so its very minimal) without granny flats.

The pure reason for this investment is to increase my serviceability to fund potential developments in Sydney so CF+ is number one priority. If i do buy in Ipswich would like to prevent a location that may fall (as other areas such as Logan rise)

Does anyone know what the implication of buying flood affected investment properties are? (properties have been fixed up and livable/rentable condition) Insurance and building granny flat and other issues?

As for Adelaide - I've never been there, dont know anything about Adelaide, have no connection (unlike QLD in general), so my resources (non monetary) would not be worth the potential gain. But dont get me wrong Im sure its could be a good investment. Id prefer sticking to east coast
 
Gach2, if your strategy is dependent on having cf+ properties through auxiliary units either by building or conversion of existing structures, then you need to be aware of the changes in Ipswich auxiliary units since Oct 2014. The Ipswich auxiliary unit that could be built used to be 65m, now it is 50m and a limit of one bedroom.

In summary,

Ipswich - there has been changes to the size of the granny flat that you are allowed to build and can rent it out to - no more than 50m in size and more favoured to rent out to relatives or visitors.

http://www.shedsnhomesipswich.com.au/about-us/shed-news/new-law-governing-granny-flats-in-ipswich/

New Law Governing Granny Flats in Ipswich

Posted by Sheds N Homes Ipswich on 7 November 2014

Ipswich City Council has recently changed the provisions for auxiliary units (granny flats) to not exceed 50m2 gross floor area and introduce a limit of one bedroom to ensure parking and street congestion would not become an issue.

Home owners will continue to be able to house relatives and visitors, or receive an additional income through constructing an auxiliary unit on their property.

When Ipswich City Council relaxed past laws so home owners could also rent out auxiliary dwellings to an unrelated party, they became a potential income earner in the back yard. A growing number of Ipswich residents started invested in granny flats with the view that they will pay for themselves over time and add value to their property.

Planning and Development Committee Chair Councilor Paul Tully said, "These changes mean residents will continue to have the opportunity to construct an auxiliary unit on their property to house relatives or visitors or rent them out, without having a negative impact on neighbours".

From Ipswich Planning website:
http://www.ipswichplanning.com.au/projects

Adoption of Planning Scheme Amendment Package 02/2014

On 14 October 2014, Council resolved to adopt major amendments to the Ipswich Planning Scheme. The purpose and general effects of the planning scheme amendments are to limit an Auxiliary Unit to a maximum of 50m2 gross floor area and one bedroom by changing the definitions of Auxiliary Unit and Dual Occupancy in Schedule 1 ? Dictionary. Consequential changes to Implementation Guideline No. 1 ? Relaxation of Development Standards for an Auxiliary Unit and for Dual Occupancies which are Used to Accommodate Relatives or Aged or Infirm Persons have also been made to align with the amendments.

The planning scheme major amendments and the implementation guideline came into effect on and from Monday, 27 October 2014.

A notice was published in the Queensland Times and the Queensland Government Gazette on Friday, 24 October 2014.

Copies of the planning scheme are available for inspection and purchase at the Planning and Development Counter, Ipswich City Council Administration Building, 45 Roderick Street, Ipswich. The planning scheme may also be viewed and downloaded from Council's web site: http://www.ipswichplanning.com.au/planning-documents/planning-scheme.

For further information, please contact Ipswich City Council's Strategic Planning Branch on (07) 3810 6251 during normal business hours, fax (07) 3281 7085 or send an email to strategic@ipswich.qld.gov.au.
 
Cherry - what you mentioned about the demographics is one of the reasons why I believe Logan has a chance of moving. The migrant community is a fresh face with potential to move the economy while Ipswich hasn't changed much in terms of demographics (this could be a good thing though)
 
Thanks beanie girl - will have a read and this itself may be a reason to stay away from Ipswich as i looking at it based on an older document (find the ICC planning documents very confusing and will definately consult them prior to any purchase)
 
any reason 12 month CG in both area are negative?

Sorry , maybe unrelated.

Amyone knows any reason 12 month CG in both area are negative. Considering property boom last year across Australia.
 
Gach2, a potential +CF play to consider is student accommodation near unis.
I brought a 6/3/2 townhouse designed esp for students near uni of southern Queensland in toowoomba recently and I beleive it will be a cash cow once its tenanted.

Just be weary you can only lend out the property to 5 individuals, anymore you will need to adhere to boarding house rules which can be quite stringent.

Good luck,
James
 
Gach2, a potential +CF play to consider is student accommodation near unis.
I brought a 6/3/2 townhouse designed esp for students near uni of southern Queensland in toowoomba recently and I beleive it will be a cash cow once its tenanted.

Just be weary you can only lend out the property to 5 individuals, anymore you will need to adhere to boarding house rules which can be quite stringent.

Good luck,
James

Was / am looking at the same thing (purpose built student accommodation) but was pretty much shot down, I assume because of poor potential CG growth, because they would certainly seem to be well cash flow positive rentals
 
Sorry , maybe unrelated.

Amyone knows any reason 12 month CG in both area are negative. Considering property boom last year across Australia.

Ah...Because there hasn't been a property boom across Australia in the last 12months would be the short answer, many places are only just warming up despite what you hear in the mass media
 
Beanie Girl - Thanks for your input - have definately had an impact on what I look for in terms of properties in Ipswich.

As for student accom, i wouldnt be interested in doing so in QLD. I do have plans of something like that in the future but would want to do it somewhere closer to home and in an area which wouldn't require a uni to survive
 
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