Gympie & QNV Constructions

[Issac_37]

Evening Folks,

I would be very appreciative of your thoughts of purchasing IP in Gympie, QLD. I have had a search through previous threads, but nothing really deals with the town prospects itself.

My parents have recently sought financial planning advice and been recommended to buy a new 3 x bedroom 2 x bath IP property in Gympie for $337k (inclusive of taxes). The figures quoted from the financial planner are as follows:

*Rent $280pw
*6% annual growth
*1.3% vacancy rate

Obviously with a relatively low rental income, reliance on the annual growth rate for capital gain is the primary concern.

1/Does this 6% growth rate assumption seem plausible over the coming years for Gympie?

2/ Having considered websites which list the historic vacancy rate, does 1.3% assumption seem a little low, has anybody with investments in the area had experience with this?

3/ QNV Constructions is the builder, has anybody had dealings with this company?

I have conducted preliminary research, attempting to gain statistics of employment rate, projected population growth, key industries etc. But would be interest in anybodies thoughts who either have IP in Gympie or have considered/discounted it to guide me.

http://www.gympie.qld.gov.au/documents/OCILC2011.pdf

Many thanks in anticipation

I

 

[jude]

Gympie

Hi Issac
I live in Gympie and own 2 IP's here. Here's my view for what it's worth.
I think it is a buyer's market and your parents could do much better than a 3 bedroon for $337k. For instance I have a brand new 4x2 brick house for sale for the same price and it has 3 of the 4 bedrooms with walk ins and tv points, 2 kitchens inside kitchen is stunning and huge with a glass window splashback, outdoor kitchen has gas fittings for BBQ, quality fittings throughout the house and wooden bi-fold doors opening from the lounge to the outdoor kitchen and deck. Lots more features and if you would like photos or more info, message me.

Also there are other new or near new 4x2 houses for sale for less than $337K. Again message me if you would like some examples.

The rental appraisal is probably right for a three bedroom house but you can get closer to $330/week for a new 4 bedroom. Location is also a factor and if you want to message the address I might be able to help further as we do have areas we locals try to avoid building or buying in.

I haven't had anything to do with QNV so can't help you there.

Not sure I agree with the 6% annual growth, I don't have the facts and figures but I do know prices are falling and have been for the last two years.

Not a great deal of employment opportunities here but the service industry is still expanding, we are due to get a Bunnings. We are within commuting distance to the coast and houses here are more affordable.

Hope this has been of some use to you
Cheers
Jude

 

[Andrew_A]

If the financial planner is receiving a commission from the developer for selling this property then how independent is their advice to your parents?

Jude raises a good point, have a browse around for established housing and look at yields, land size and value, location and what you can get for your money nearby.

 

[FQ360]

Hi Jude,

Just wandering your opinion on the rental market in Gympie? Strong?

Cheers,
Chris

 

[jude]

Hi Chris
I have just rented the new house I had for sale, it took a week to find a suitable tenant. I'm happy with that as I am leaving it on the market for investor interest with a tenant in place. I think new houses are easier to rent at the moment.
I have a unit becoming vacant next week and so far no lookers. It's only one year old but is competing with more places available to rent than I have seen in the past. I am being fussy so expect to be vacant for a few weeks. My PM has mentioned that they have people walking in every day looking for accommodation but their needs are varied.
If you are interested in Gympie for an investment IP I think there are two viable options. One, buy land as there are some cheap blocks available close to town and build. Then sell or rent. Two, buy a cheap brick house say for < 230K and rent for $260. I am currently helping a first home buyer purchase a solid brick home and there are some good buys out there. She is about to offer $205 for a well built brick 3 bed home with good views.
(Please remember I am not an expert though and do your own research.)
Cheers
Jude

 

[Issac_37]

Difficult situation

Andrew A and Jude,

Thanks very much for your responses on this one. I am currently overseas with limited computer access so it is handy to get some other thoughts on this matter.

Andrew - the financial advisor (who my folks have already paid several thousand dollars for the service of) finally acknowledged that they do receive a kickback commission from the property developer. When challenged with the information comparing their recommended property to the similar price of superior properties in the area, they steadfast refused to alter their opinion of the recommendation, using the 'superior fixtures' in the house as evidence of value because the depreciation would be slightly higher...

Parents are understandably not satisfied with their financial advisor now, having felt that they can't trust the company... Not sure what options exist in the contract to attempt to regain the upfront cost noting what I believe to be very questionable advise.

Jude - I have PM you with a couple of questions about Gympie also.

Thankyou all,

 

[rocko]

Hi Jude,
I'm contemplating investing in Gympie. Do you mind if I ask you a few things?