How to identify high growth suburb in Brisbane without residex report

Hi dear all,

I am starting to search my second properties in Brisbane. I would like to hear from experienced investors how you manage to structure your CG and cash flow property up to 10 properties?

Some people said one CG and one cash flow. Redom had adviced to keep 6% yield to maintain borrowing power so you can keep buying.

For my first purchase, I use residex report to assist me to identify the high growth area. Others might look at past growth, transport,school, 15km to CBD, increased development approval etc. According to residex report Brisbane QLD metro, almost no suburbs near CBD (15km)were listed in recent prediction report.

I had chat with Barbara residex before, she said many suburbs were not listed anymore as it had already performed certain %. For instance Manly 4179, have performed >10% in last 12 months. How do I know if it will continue performing?

If it does not perform or grow too slow, it will affect the speed of building up the portfolio. I am expecting to draw equity in 12 months time.

Should I consider any combination of other strategy when the initial rising cycle period is over?

thank you. I am looking forward to hear fellow investors' opinion.

cheers
Paulina ~~
 
How do I know if it will continue performing?

Hi Paulina,

I like to use this for all my investing needs - http://decidefor.us/

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Regards,

Jamie_
 
Hi dear all,

I am starting to search my second properties in Brisbane. I would like to hear from experienced investors how you manage to structure your CG and cash flow property up to 10 properties?

Some people said one CG and one cash flow. Redom had adviced to keep 6% yield to maintain borrowing power so you can keep buying.

For my first purchase, I use residex report to assist me to identify the high growth area. Others might look at past growth, transport,school, 15km to CBD, increased development approval etc. According to residex report Brisbane QLD metro, almost no suburbs near CBD (15km)were listed in recent prediction report.

I had chat with Barbara residex before, she said many suburbs were not listed anymore as it had already performed certain %. For instance Manly 4179, have performed >10% in last 12 months. How do I know if it will continue performing?

If it does not perform or grow too slow, it will affect the speed of building up the portfolio. I am expecting to draw equity in 12 months time.

Should I consider any combination of other strategy when the initial rising cycle period is over?

thank you. I am looking forward to hear fellow investors' opinion.

cheers
Paulina ~~

I have used these residex reports and they are hit and miss,better to learn how to gauge when a suburb is about to rise and then go from there, falling listings and time on market is a big one
 
Hi Paulina. :)

If relying on equity growth for deposits to continue purchasing, may look into a manufacturing equity strategy (e.g. reno's, developments, etc). By adding value and manufacturing equity, you may be able to 'recycle' your initial deposit over and over again. Of course that would depend on the success of the strategy/market conditions/etc.

Regarding the 6% figure, that's based on recycling your existing borrowing power with lenders that take debts at actual repayments (explained in this thread: http://somersoft.com/forums/showthread.php?p=1282698#post1282698)

Its just a general rule, but with investments that have a 6% yield, close to median household income, no excessive personal debts - should be able to grow a reasonable size portfolio and stretch out any serviceability issues with todays credit market settings.

Cheers,
Redom
 
I am looking forward to hear fellow investors' opinion.

Hi Paulina,

Quite a few of our properties have doubled/tripled in value over the course of the last decade.. Rents on those have doubled & some close to tripled also.

I believe we have attained that growth because early on in our investment journey we decided to target / purchase in areas that had recently been approved for or were in the planning stages for gentrification.

We looked for the following 4 flag sectors injecting money into land locked suburbs (not fringe areas with surplus land supply). -

Government, Commercial, Retail & Private sectors

We discovered this ultimately uplifted & beautified the area resulting in people's attraction thus moving in and creating demand...and as you know when demand exceeds the supply it puts upward pressure on prices.

We have found this to work very well if you are looking for short to medium term capital growth so as to leverage against and build your portfolio faster.

Typically these are some of the signs we looked for where sectors were injecting money -

A/ Local/State/Federal Government. ie Major arterial roads, Govt Depts locating to area, Street Scrapping, New Public Transport, Recreational facilities, Hospitals/Medical facilities, Suburb Redevelopment Authorities being formed. etc

B/ Big Multi National Retail & Commercial type companies. ie Major Shopping Centres, McDonalds Hungry Jacks, KFC, Bunnings, Harvey Normans, Good Guys, etc. These companies spend $Millions on market research before going into and setting up shop in an area. If there was no current or immediate future demand for their products and services they would not be moving in, so leverage off the back of their research.

Sources for information as part of your due diligence - You can check out all the federal/state/local government planning & development websites at this one convenient link ( http://www.oultwood.com/localgov/countries/australia.php ).

Other sources I use to gather info are from all the various big multi-national company websites, local newspapers, community news, local businesses, and people in the area.....general networking etc.

C/ Private People/Investors. ie Owner occupiers and Investors bowling over old houses then rebuilding new modern homes and redeveloping town houses / villas.

Get out and about. Jump in your car and drive around the area. Better still is once you're in your prospective area hit the streets by foot. You will see so much more on foot than by driving.

I hope this provides some food for thought.
 
Thank you very much Mike. Sorry guys for late reply. May I know if you have certain strategy to gauge the right time when the suburb is going to rise? I heard that some people will use spread sheet and gather all inform of different suburbs and analyze and conclude which is the the top potential suburbs. Will you be able to share a bit of your selecting process of high growth area.

Cheers
Paulina

cheers
Paulina
 
Hi Redom,

Thank you for the message and reply. Yes, I do agree with you that manufactured growth will speed up the process. To include subdivision and property development will be part of strategy next. I will speak to you more tomorrow. Thank you again.

cheers
Paulina
 
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