IP, Redbank Plains QLD or Smithfield SA

[JTBT]

Hi guys,

My name is John' I'm 26 from South West Syd. I have been lurking on the forums for the past couple of months reading up the valuable information on offer.

I am now in a position to jump into property investment (late bloomer? hehe) I still very new to all this but some information gained from this site has been quite valuable. At this stage there are 2 properties which I am interested in but would like your thoughts and opinions. Both homes will be brand new and are the 'turn key' style packages both build by Rivergum homes. Any reviews on these guys?

Option A)
Smithfield SA, Playford Waters Estate
3br,1bath,1 Garage 374sqm land
Price: $295k
Projected rental: $270-$300?

Option B)
Redbank Plains QLD, Mountview Estate
3br, 2Bath, 1 Garage 315sqm land
Price: $330K
Projected Rental: $280-$320 'perhaps a little bit more?'

Both areas show similar social economic status, both have infrastructure projects happpening. Would it be wrong to just jump at the cheaper property?? From my research I like the sound of the Mountview development as there is a train line that will be built, not to mention the additional infrastructure being invested by the government up there. I have also contacted the Ipswich council regarding the issues of land subsidance and they said that particular estate/area there is no issues. But my main concern is with the stigma of the RBP area/surrounding suburbs being affected by land subsidance would this affect house prices or future value??

On the other hand I have the option of the Playford Waters property, its on a corner block. Even though land size is 374sqm once a fence is in place it effectively reduces the amount of land that can be used ie backyard?? Is it a bad way of looking at it? Furthermore, after digging around on RE.com.au I see that 2yo properties with similar spec are listed up for anywhere from $270k-$300k. Would I just be better off making a bid for those ones and rent it out straight away without having to wait for the house to be built. I crunched some rough figures and it would cost roughly the same in terms of stamp duty, servicing the land payments etc...

Apologies for the long first post but would really appreciate some thoughts or advice from the more experienced investors as I would like to get the first one right and a decent foundation for my portfolio.

John

 

[weg]

Why not buy an established house that's a couple of years old in these estates similar to this one in PW.

http://www.realestate.com.au/property-house-sa-smithfield-106891044

In regards to Playford Waters it looks like you'll be paying a premium for new. 295K is pricey for a 3/1/1 and you're only likey to get $260 - $270 rent.

Did a REA quote you those figures .

If you want to spend more then there's this with 2 garages which will get more rent and is still well under 295K.

http://www.realestate.com.au/property-house-sa-smithfield-106891236

There's still depreciation in the established house with none of the hastles of building from afar.

 

[steveadl]

You can also pay substantially less just around the corner in a smaller development. Such as these two:

http://www.realestate.com.au/property-house-sa-smithfield+plains-106882163

http://www.realestate.com.au/property-house-sa-smithfield+plains-106771397

http://www.realestate.com.au/property-house-sa-smithfield+plains-106558744

(I think No.41 is asking a bit much, though I hope he gets it!)

Varies for each house, but estate is about 5yo so most houses about 4yo or less. Still good depreciation and a lower entry price into an already established property that rents out immediately. You'll pay a higher premium for PW because it's a bigger estate. Having said that, the estate above will also become bigger in the coming years once Smithfield Highschool next door is closed down.

PS Factor into your thinking, in the new estates in the northern suburbs, properties with double garage/carports are much more sought after than single car properties. I personally wouldn't buy a single.

 

[mystery]

JTBT, .... For you to add to your research .......

We own IP's in both Redbank Plains and Elizabeth Vale (Playford), ...... The holding costs in SE Qld are probably double what they are in SA. Just something to keep in mind.

Our SE Qld water/council rates are approx $2,800 per year each for older style IP's on typical suburban blocks compared to much less in SA. Also from memory we get a cheaper PM rate in SA as well. Just keep this in mind when doing the numbers.

(I think No.41 is asking a bit much, though I hope he gets it!)

Typical Steve, .... are you trying to hoodwink the banks valuers again? ....

Mystery

 

[steveadl]

Typical Steve, .... are you trying to hoodwink the banks valuers again? ....

Mystery

Who me? You've got me all wrong Mystery!

 

[JTBT]

Hi guys,

Thank you for your opinions and advice. Your sentiments definately echo what I have been thinking..

This is such a newbie question but I suppose once I find something I like, the next step would be to fly over there and have a quick inspection? Or do I organise some sort of building inspection which will cover all the bases for me?

Cheers

John

 

[rungirl]

Hi John,

I don't know much about the SA market but I own an IP in Redbank Plains.

Like you, I also looked at the new estates and decided to go for an established property in the end simply because I found entry costs to be lower and the rental return to be almost just as high.

My Redbank Plains property is near Mountview Estate. It is a 6 year old lowset brick, with 4 bedrooms, 2 bath, 1 garage on 450sqm. Purchased for $270k and getting $290 p/w rent. I've noticed even the brand new houses are getting only about $300 p/w rent.

As for rental return, I've not seen prices go up over the last year. I just signed a new lease with new tenant and rent stayed the same as last year. There are far too many new houses going up, keeping the rental market very competitive in Redbank Plains. I still had no problems renting out house though, property has only been vacant for 3 days in the last 15 months of owning it.

By the way, is the train station near Mountview Estate confirmed? I thought it was just all talk?

Cheers and goodluck with your decision

 

[JTBT]

Hi John,

I don't know much about the SA market but I own an IP in Redbank Plains.

Like you, I also looked at the new estates and decided to go for an established property in the end simply because I found entry costs to be lower and the rental return to be almost just as high.

My Redbank Plains property is near Mountview Estate. It is a 6 year old lowset brick, with 4 bedrooms, 2 bath, 1 garage on 450sqm. Purchased for $270k and getting $290 p/w rent. I've noticed even the brand new houses are getting only about $300 p/w rent.

As for rental return, I've not seen prices go up over the last year. I just signed a new lease with new tenant and rent stayed the same as last year. There are far too many new houses going up, keeping the rental market very competitive in Redbank Plains. I still had no problems renting out house though, property has only been vacant for 3 days in the last 15 months of owning it.

By the way, is the train station near Mountview Estate confirmed? I thought it was just all talk?

Cheers and goodluck with your decision

Thanks for the feedback 'Rungirl'. I read that the train station is expected to be completed around 2013.

How has the CG been for your property since you have owned it?

 

[rungirl]

To be honest, I've not really monitored the area closely as this IP is a bit of a buy and hold for me and I don't expect to make much capital gains in short term. Certainly, looking at the market now, I see similar houses being sold (not advertised price) for 290-310k which makes me think it's doing OK, but I don't know how much of that I can credit to the market going up, or perhaps I just picked up a decent bargain at the time.

Apart from inflation, I actually don't feel like the market is moving very quickly in Redbank Plains because there is such a steady supply of new housing available. I'm hoping we may see some gains over the next few years though and a new train station always helps!

 

[RumpledElf]

I find it mildy amusing that where I live we have the same rents as the Adelaide fringes (if not higher, apparently) yet the cost of housing here is so much lower and noone wants to invest here! You can build a new house here and get 10% yield instantly. PM fees are obscene though.

 

[Edmond Dantes]

I find it mildy amusing that where I live we have the same rents as the Adelaide fringes (if not higher, apparently) yet the cost of housing here is so much lower and noone wants to invest here! You can build a new house here and get 10% yield instantly. PM fees are obscene though.

Obscene because it is difficult to rent it out? Population too small? risky tenants? why do you think no one wants to invest there? no cg prospects?

 

[RumpledElf]

No, they're 9.9% plus fees for everything and the rest.

Very high rents here, zero vacancies, good tenants, excellent CG. The problem is the population is too low to attract anyone from the capitals and the locals are exceptionally anti-tenants, so you see all these houses empty for sale and the caravan park and all the pubs are booked out solid with working people who have nowhere to live. If you actually find one of the rare few investors here, they all wax lyrical about how much rent they get and how easy it is to get tenants.

Conversely you find low income locals here can't get rentals (all the houses are rented to the high-income out-of-towners) so there is this interesting effect here where everyone without money is going elsewhere, leaving all the richer folks behind.

 

[Firsttimer]

Rumpled Elf, where are you located? My have a squiz

 

[JTBT]

Thanks for the info so far guys. Was wondering if anyone can give me abit of insight on Smithfield as an area? Is it a bad area? known for crime? what is usually the first thing people think of when you say 'I reside in Smithfield'

 

[wobbycarly]

Thanks for the info so far guys. Was wondering if anyone can give me abit of insight on Smithfield as an area? Is it a bad area? known for crime? what is usually the first thing people think of when you say 'I reside in Smithfield'

"Where's that?"

 

[Delilah]

Our SE Qld water/council rates are approx $2,800 per year each for older style IP's on typical suburban blocks compared to much less in SA.

Really? I live not far away but in Brissy council and pay half that in water and rates per/year.

Doesn't the Redbank area have serious mine/subsidence issues? My work colleague had a place in Collingwood Park which subsided with major structural damage. He got paid out by the govt and has moved away.

 

[mystery]

Really? I live not far away but in Brissy council and pay half that in water and rates per/year.

Doesn't the Redbank area have serious mine/subsidence issues? My work colleague had a place in Collingwood Park which subsided with major structural damage. He got paid out by the govt and has moved away.

Hi Delilah, ....... We have one IP in RBP and the other in Goodna. Our water/council rates for 2009/10 are as follows, .. remembering they both come under Ipswich Council:

Goodna (3 bed brick & tile on 500m2) = $2409
RBP (3 bed brick & tile on 800m2) = $2679

I'm not sure about Brisbane rates, but as you can see Ipswich is very expensive. Subsidence is not an isue with either of our properties, ... maybe they are built between mine shafts ....

Mystery

 

[lura]

Train line - definately on the way

The proposed train line that will loop through Springfield - stage 1 is nearly complete!! !yea!!! I have been researching this for years.

They have been clearing and prepping alongside the centenary Hwy towards Springfield for some while now and when I drove past the Orion Shopping Centre the other day - the clearing is well and truely underway for the start of the Springifeld Station - SO EXCITING!

About Redbank Plains - rent is not moving - still a good long term hold because it adjoins really good developments in Augustine heights and Brookwater - close to Orion and surrounded by Ripley Valley - projected 180,000 people over the next 20 years - major players taken positions in Swanbank and Willowvale and Amberley and Budamba and Ipswich CBD- solid dollars that won't easily go away.

$320pw for 3 bedder ... probably not because you can get 4 beds for same or similar money.

 

[JTBT]

Really? I live not far away but in Brissy council and pay half that in water and rates per/year.

Doesn't the Redbank area have serious mine/subsidence issues? My work colleague had a place in Collingwood Park which subsided with major structural damage. He got paid out by the govt and has moved away.

Mainly around the Collingwood Park area. I was on the phone to Ipswich council asking about this and apprently RBP is clear from this issue. But still advisable for you to call about the specific block your buying to make sure it's all good.

Ok to summarise so far! From what I can gather with the train line going in and other things happening in this area, it should show some good CG? On the flip side due to a steady stream of new properties rental gains will be minimal at best?

Now I just need abit more info on Smithfield SA

 

[rungirl]

I use Ipswich Council's online site to search for info on mining influence areas:
http://pdonline.ipswich.qld.gov.au/pdonline/masterplan/enquirer/default.aspx?page=search

Good to hear a train line is going through Redbank Plains. Currently, public transport isn't fantastic...