Finally going to jump in and buy our first IP (in Nerang, QLD)

[bennos]

Well, after months of reading books and reading forums (this one especially) I'm finally going to put up some cash on an IP!!! How nerve wrecking... got to keep reminding myself that not all debt is evil.

The suburb is Nerang. The area has the advantage of being close to many attractions such as the theme parks and Surfers, and good public transport to Brisbane. The train station was a big tick for suburb selection for me. I hear that there is a new shopping complex being built next to the train station. The other suburbs I had on the short list was Robina, Varsity Lakes and possibly Upper Coomera or Helensvale.

The IP I'm looking at is a townhouse (new developement) within a very short walk to the Nerang train station. It's on Boulton Dr. It is a 3 brm, 2 bath, DLUG, A/C to all rooms etc. The one I'm looking at is going for 465K and the rent is estimated to fetch 410 to 420 per week (body corp $39/wk). Here is a realestate.com.au with the listing.
http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=104454447&f=0&p=10&t=res&ty=&fmt=&header=&c=25767426&s=qld&snf=rbs&tm=1195642291

I haven't been up to look yet, I'm in Sydney. The plan is to get up there next week to inspect it. But for now... What are your comments/experiences/knowledge about the Nerang (SE QLD) area? How does the figures look for those who are more intimate with the area?

 

[stumunro]

looks very nice! don't forget your paying a premium due to it being brand new and developed! but im sure you have done all your DD ! Looks like an awesome place mate what are the vacancy rates like in the area?

 

[Nth Brisbanite]

Well done! At least you have made that first step, not like a friend of mine who dreads the thought of going into any debt at all. She has close to a million dollars in equity but thinks investing in real estate is too risky.

Don't think that you can go wrong with anything that you buy in SE Qld. Looks to be well located

 

[NedKelly]

I live in Nerang and I believe it is an up and coming area with good prospects. However, I would question your choice of location and property. Boulton Ridge is just outside Nerang and not close to any shops until or unless they build a new shopping complex. It is close to the industrial area which starts at Lawrence Drive.

Also these townhouses are top dollar, you could get a new house for less than that. I think these townhouses would certainly appeal to the commuter due to the proximity of the station. Maybe a young single guy/girl. Why not go for a 2 bedroom as you are really appealing only to families with a 3 bedroomed.

As for rent, where did you get that estimate. I doubt you would even get $300. Here is a similar property going for $260.

http://www.realestate.com.au/cgi-bi...=&fmt=&header=&c=97839882&s=qld&tm=1195682637

 

[bennos]

There was another unit in the same developement but with a single garage and neighbours on both sides that rented for 380.00. The one I'm buying has a double garage and only one neighbour (other side has side access to the backyard).

While doing my DD, I did a whereis and found that the Woolies and shops were only a 2km drive from Boulton Dr.

Nedkelly - can you confirm or have you see or heard about a shopping complex being built next to the train station? As stated in my first post, I haven't been up there yet and I still have the option of pulling out if I don't like what I see when I go to Nerang next week. I guess there is only so much one can research into without going to inspect first hand. The link you posted is of a property with a single garage, only 1 bathroom, only one A/C (in the main bedroom) and an older unit with no onsite amenities. I'm not sure of it's actual location.

I'm not sure of the actual % in vacancy rates of the area but I called a coople of REs in the area asking about renters. They sounded very positive and said that there has been no issues with getting their stock rented out.

 

[wylie]

Firstly, I know absolutely nothing about Nerang, position of either of the townhouses in this thread or anything else, BUT to me just looking at the pictures they are chalk and cheese.

The new one is just brand new and gorgeous whereas the one going for $260 looks a little dated and tired. A pity there are not more photos of the cheaper one but if I was renting I would choose the first one any day. Whether or not I would pay the extra is another thing....

I would think you need to have a look at what else is around when you come up.

Wylie

 

[bennos]

I'll be there for 2 full days, so my plan is to visit...

SE QLD
Nerang, Upper Coomera, Helensvale, Robina and Varsity lakes

Brissy
Kelvin Grove and surrounding areas and Cooparoo and it's surrounding areas.

Any suggestions of other areas?!
Know of any very cheap accommodation around Gold Coast? I may even sleep in the bomb I'm planning on renting to get around in... I know, I'm a complete tight a@#$

 

[NedKelly]

I really don't see you getting over $400 per week for a townhouse.

Here is a link to the most expensive townhouse for rent in Nerang at the moment:-

http://www.domain.com.au/Public/PropertyDetails.aspx?adid=5507394

They are asking $280.

I am not aware of a new shopping centre being built in Nerang. Best phone Gold Coast City Council and ask them. Better still, when you are here call in and have a chat with them. The planning dept. is in Nerang, ask them about their plans for the station area.

Hotels: try the Hinterland Hotel, or the Town & County Motel (right next to GCCC).

 

[alexlee]

NedKelly has a point. The only thing I see for rent in Nerang renting for 400ish pw are renovated or newer houses. I see some in Ashmore and Pacific Pines, but that's not Nerang.
Alex

 

[Rolf Latham]

Hiya

Im a Nerang Utang as well

That sort of money will buy smallish house and land close to new in places like Alexander Ridge.

Rental rtns for anything decent are quite ok, older houses opposite from mine on dry blocks that have recently sold for 420 to 430 are generally fetching 420

Riverfront places that have sold for 6s are renting at 600s.

The biggest growth has been in the 25 to 50 % portion of the market.

Where you could readily get a sub 300 k 3 bed x this has gone to near 400 in 18 mths

Nerang still has issues with some of us funny residents, slowly these will iron themselves out though.

ta
rolf

 

[chran]

Congrats mate! Aww I'm sooo jealous (the good sort) now, having no IP yet. It looks good and If I were you I would be looking at long term prospects (buy n keep a la Somers).

 

[bennos]

Thanks... I'm more nervous then excited about it all (can't help it). Yep, I'm definitely planning to hold for long term.

BTW, anyone know if the costs of flight, accommodation and car hire for interstate research trips are tax deductible?

 

[alexlee]

BTW, anyone know if the costs of flight, accommodation and car hire for interstate research trips are tax deductible?

Not if you don't own anything up there. But if you buy you should be able to capitalise it as part of your cost base. Not everything, though, unless you really do nothing but look at property.
Alex

 

[Bazza]

Hi Bennos,

It's good that you have made the decision to go ahead with your first IP but I really think you need to look at other properties first.

Rents in Nerang are currently around the $300 mark and with the body corp of $39 pw means you will be out of pocket by at least $200 pw initially.

We recently purchase an IP (3bed,2bath,DLUG) in Merrimac which is about 5Km from Nerang for $370k and rented it out for $365 pw. So there are still some bargains to be had if you take your time and do your DD.

Houses with more land content give you more capital gain and are more desirable to prospective tenants.

Good luck,

Bazza

 

[bennos]

Thanks Bazza, this seems to be the general consensus about the rental return being too high. I'm very glad of this forum... I can now go up there armed with more info then what I had. I'll still look at this unit but will be on high alert. Maybe spend a little more time searching for other properties in the same suburb.

 

[alexlee]

Thanks Bazza, this seems to be the general consensus about the rental return being too high.

To put it another way, Bennos, why do you believe that you'll get that level of rent?
Alex

 

[bennos]

Thanks for the PM reply Alex.

Some comments/feedback from those who have an opinion on this... If you bought/had a townhouse or unit in a developement. Would you rather more owner/occupiers or more renters in the block?

 

[alexlee]

Thanks for the PM reply Alex.

Some comments/feedback from those who have an opinion on this... If you bought/had a townhouse or unit in a developement. Would you rather more owner/occupiers or more renters in the block?

Usually, more owner occupiers are better because they take better care of the place, and there is less wear and tear from people moving in and out all the time. Also, owner occupiers are less likely to sell.
Alex

 

[MickInvestor]

And there is less competition from other investor owned units in the area

 

[LynnH]

I agree with MickInvestor's comments - in the suburb next to ours there are large numbers of unit complexes (and more being built as I post).

The reason they were originally built was that that was as far as the train line went. However, now there are always plenty of these units to rent - and signs up permanently advertising this fact. I certainly wouldn't be buying a unit in this area.

Cheers
LynnH