IP in Canberra??

[ps0104]

Hi all

What are peoples thoughts on Canberra as a city to invest in? My thinking is the local market is probably going to be a bit flat for the next 12 months or so with public service growth stalled or going backwards...so will hopefully be able to pick up something cheapish and then sit on it and wait for the public service to expand again to stimulate demand for property.

Meanwhile, rental yields across most of Canberra seem to be pretty high with a very low vacancy rate and transient population.

I have about 400k to spend.

One thing I have looked into is a 2brm apartment in Bruce given the uni population and relative proximity to the city & belconnen, however would I be better off looking further out and aiming for a house?

Any and all advice greatly appreciated.

 

[WillG]

Not sure what your question is. Are you asking if your plan to invest in Bruce is sound? What are you trying to achieve in the short, medium and long term?

 

[Propertunity]

My thinking is the local market is probably going to be a bit flat for the next 12 months or so with public service growth stalled or going backwards...so will hopefully be able to pick up something cheapish and then sit on it and wait for the public service to expand again to stimulate demand for property.

if Labor lose the next Federal election, which looks very likely, the public service numbers will be doing everything but expanding! Joe Hockey has promised mass layoffs of public servants.

 

[ps0104]

Not sure what your question is. Are you asking if your plan to invest in Bruce is sound? What are you trying to achieve in the short, medium and long term?

Sorry, my question is where and what to buy for around 400k in Canberra. My main aim is to acheive a decent rental return so as to not be too much out of pocket after paying the interest on the loan and to acheive decent CG, with a view to holding for 8 years+.

 

[WillG]

Are you planning on buying a single ip and hold for 8+ years or several ip's in the next couple of years? What do you mean by "not too much out of pocket"? $100 per week?

I have found that the ACT has been good for capital growth but net rental yields are generally poor due to land tax. I have been investing in Caberra through the good times and bad times and generally look for average houses in average suburbs. These have always provided consistent capital growth ans remained rented. I don't generally invest in places like Bruce because I find better value in older suburbs with greater scope to rennovate. I have found that older suburbs attract 'less transient' renters. These are the kind of renters I like to attract

 

[Angel13]

I regularly take a peek on All Homes and there seems to be quite a few 3 bedroom houses under $400K with renovation potential.

There are also brand new 3 bed, 1 bath, single garage houses in Macgregor on small blocks under $400K.

We're probably going to do our next investment property in Macgregor. Just getting finance ready atm so we can pounce when an opportunity comes up.

 

[Jamie M]

Hi there

I'm not a qualified BA and this is only my opinion.

I'd stay away from new or newish stock. There's plently of it, particularly in Bruce and I can't see the CG being too flash in coming years - purely from a supply outstripping demand point of view.

For $400k, you could get a 3 beddie with a bit of land in Belconnen up north or Tuggeranong down south. If you can find something that's in its original condition, in need of a cosmetic reno and a bit of landscaping then you're onto a winner. With these properties, you can manufacture growth rather than waiting for CG to kick in. You don't need to spend a lot of money to add a bit of value. You'll also be able to up the rent once the renos complete.

Yes, the yield is good here. We have a few in the ACT/Qbn and they are never vacant.

From a macro point of view, the APS isn't going anywhere. It's trimming some fat via voluntary redundancies. Are there any recruitment agents on SS from the ACT? Would love to hear how business is going.

Cheers

Jamie

 

[camdog]

Hi,

I live just out of Canberra...

If your looking for good investments look to Queanbeyan. My budget is about 300k.
For example: $289,000 unit
2 bed, 1 bath
96sqm
30+ years old
Renting between $420-$440
Just went under offer actually


Queanbeyan is in a very good location right next to Canberra.

I would hold off until you see how the aps turns out. I am actually looking at renting a place to live in first. It amazes me how you can pay 400 for a 1 bedroom unit in Bruce, Franklin and most of the new areas, but you can pay the same for a 3 bedroom house in south side.

 

[geoffw]

Agree with the comments about the new buildings. There's a lot already built in Bruce and Belco, and there's already a higher vacancy than there has been for a while in Canberra. There's more student accommodation just come online this year- and there's a log more which is still being built. Just have a look at the building activity around Bruce now, as well as the new high rises in Belco.

I have a place in Lyneham which has just become vacant. I was worried as a high rise close by is just coming online- but it is still attracting strong interest. People still like a house, even a small one, which has a little individuality and grounds.

As the others have said, go for the house instead of a unit.

 

[Nemo30]

Agree with everyone else - go for a house and stay away from the units in Bruce and Belco.

I bought a 3br house in west Belconnen for $385k earlier this year - rented for $440 first day it was available.

I'm not particularly worried about the APS cuts - It all goes around in a circle - they pay people who are retiring anyway lots of money to leave and then in 2 years time they recruit again and the number of staff ends up greater than when they started.

 

[ps0104]

Thanks very much for all of the advice. I certainly take the comments on board in relation to sticking to a house as opposed to a unit in bruce or belconnen.

Would something like the following fit the bill?

http://www.allhomes.com.au/ah/act/s...itten-jones-drive-holt-canberra/1316817965311

http://www.allhomes.com.au/ah/act/s.../14139565107411?lid=168187772&prid=1395651074

Further, there appears to be some good 3 brm houses and townhouses under 400k in Ngunnawal. Any thoughts on Ngunnawal as an IP location?

For example- http://www.allhomes.com.au/ah/act/s...coe-crescent-ngunnawal-canberra/1316814649311

Thanks again for the help and advice- much appreciated

 

[Dave_R]

I have an IP in Ngunnawal, and I've found that it has always been a popular area for rent-seekers. Many places seem to be rented within 1 to 3 weeks.

While you can get places that offer good yields, Ngunnawal in general has been a bit flat for prices (both rental and to buy) over the past year or so - similar to most of Canberra in that regard anyway. Also, since the properties are likely to be 15 years old or less, there isn't too much potential to add CG through renos. It really depends on your strategy.

That said, nearby Palmerston has seen growth in houses up 10+% over the past year (if you believe the figures) - so I'm hoping Ngunnawal is next!

 

[recruit2]

I'm not particularly worried about the APS cuts - It all goes around in a circle - they pay people who are retiring anyway lots of money to leave and then in 2 years time they recruit again and the number of staff ends up greater than when they started.

Exactly - spot on.

 

[Angel13]

Thanks very much for all of the advice. I certainly take the comments on board in relation to sticking to a house as opposed to a unit in bruce or belconnen.

Would something like the following fit the bill?

http://www.allhomes.com.au/ah/act/s...itten-jones-drive-holt-canberra/1316817965311

http://www.allhomes.com.au/ah/act/s.../14139565107411?lid=168187772&prid=1395651074

Further, there appears to be some good 3 brm houses and townhouses under 400k in Ngunnawal. Any thoughts on Ngunnawal as an IP location?

For example- http://www.allhomes.com.au/ah/act/s...coe-crescent-ngunnawal-canberra/1316814649311

Thanks again for the help and advice- much appreciated

That one in Scullin looked pretty good.

 

[Jamie M]

Thanks very much for all of the advice. I certainly take the comments on board in relation to sticking to a house as opposed to a unit in bruce or belconnen.

Would something like the following fit the bill?

http://www.allhomes.com.au/ah/act/s...itten-jones-drive-holt-canberra/1316817965311

http://www.allhomes.com.au/ah/act/s.../14139565107411?lid=168187772&prid=1395651074

Further, there appears to be some good 3 brm houses and townhouses under 400k in Ngunnawal. Any thoughts on Ngunnawal as an IP location?

For example- http://www.allhomes.com.au/ah/act/s...coe-crescent-ngunnawal-canberra/1316814649311

Thanks again for the help and advice- much appreciated

Hi there

The Holt property has little scope for value add and body corps can be annoying. They can also limit your ability to modify the property. There also seems to be a lot of townhouses in the area.

The Scullin property is on a tiny block - this will probably effect future value. People looking to buy in this area are likely to favour a decent yard. It's also semi renovated - if that kitchen didn't look so schmick, it would probably have sold for a lot less.

The Ngunnawal property is on an intersection of a busy street - again, the block is tiny but that's expected in these parts.

Just my two cents - others might disagree.

Cheers

Jamie