First Investment Property Brisbane - Am I on the ball?

[cartoonwally]

Hey guys, first time posting about myself, long time lurker.

For starters, I currently have $75k deposit and am on $85k-100k p.a income, my investment goal is to generate a passive income of $400 p/w and generate enough capital to start my own business by the time I am 30 (I am currently 26). I estimate I will need $100k-200k of capital to do this.

I have a mortgage broker sorted (thanks Jamie) and have been on the hunt since last October. After doing the research and lurking Somersoft and trying to absorb as much information as possible, I have pinpointed my search to the suburbs of Bald Hills (south of old Gympie Road), Bracken Ridge (West of Norris Rd), and Fitzgibbon/Carseldine areas. I have chosen northern Brisbane suburbs because I am on the north side myself and have knowledge of these areas from growing up here. I have a budget of maximum $450k, but the closer to $400k the less nervous I am. I have chosen these suburbs because they are close to the train line and / or have good bus routes to the city, and these suburbs are the closest to the CBD I can purchase a house for in this range.

I am looking at 4/2/2 houses, low set brick with minimal maintenance, and good for renters. I have been ready to place offers on two houses, which have both gone for $420K - $430K, so I think I am in the ball game here.

My questions are, is my thinking sound? And am I looking in the right suburbs with the correct criteria?

 

[Mr. Fabulous]

enough capital to start my own business by the time I am 30 (I am currently 26). I estimate I will need $100k-200k of capital to do this.

Why? What sort of business are you looking to start? Can you do it outside of work in your spare time until it is generating enough revenue for it to stand alone?

If so, you should start it right now.

 

[Brady]

Why does $50k more debt scare you?

Only equates to around $50p/w more.

Beer money for the week

 

[cartoonwally]

Why does $50k more debt scare you?

Only equates to around $50p/w more.

Beer money for the week

Haha... I am looking at 88% LVR and $450K purchase price doesn't leave me with a lot of reserve in the bank should something go wrong.

 

[Corey Batt]

Why does $50k more debt scare you?

Only equates to around $50p/w more.

Beer money for the week

My thoughts too. Many people will build a psychological than 'real' walls when trying to invest in their future.

$50/wk, when you factor in there will most likely be a marginally higher rental amount on these properties too you will be looking at 2 McDonalds meals and an icecream cone.

 

[Jamie M]

I have a mortgage broker sorted (thanks Jamie) and have been on the hunt since last October.

No probs - welcome aboard Good to see you posting.

Cheers

Jamie

 

[jerryparker]

Haha... I am looking at 88% LVR and $450K purchase price doesn't leave me with a lot of reserve in the bank should something go wrong.

Cartoon,

Its hard to make clear decisions when you are stressed and don't feel confident.

Ive been in both situations, too much tax too much equity, and too much debt.

In the too much debt I got too conservative and lost opportunities.

Don't over invest so you can sleep at night, and you have to judge your risk tolerance.

You can do a risk profile, but in the end its your bed to sleep in at night!

Cheers,

Jerry Parker

 

[Investor78]

I'm more familiar with the southside, but if your areas are near good train/bus and possibly not too far from Chermside and vacancy rates are low, then you should be right.

I assume the demographics in those areas favour working families and therefore a 4/2/2 house should have good demand.

 

[MIW]

I am looking at 4/2/2 houses, low set brick with minimal maintenance, and good for renters. I have been ready to place offers on two houses, which have both gone for $420K - $430K, so I think I am in the ball game here.

My questions are, is my thinking sound? And am I looking in the right suburbs with the correct criteria?

Congratulations,
I hold few IPS in Carseldine, and one in Bracken Ridge, no problem with rent there but did not have that much CG though...well most of QLD didn't either, right, in that time? So if you are looking long term then, well time will tell right and you need to start somewhere so I think you should be ok, as long as you start and keep learning....
Just one thing the demographic of the suburb should dictate the IP you buy, so if mainly 4/2/2 are present that's what you buy, but say if in Moorooka it is 3/1/1 then that should be the norm, I hope that helps...
Basically, if 60% are units in the suburb then that's what you should buy but if 80% are houses then I would stick with that demographic for that suburb... That's just my opinion and strategy though!