Looking for good ROI property around 400k any ideas

C

Craiginqatar

Hi there,

I'm an Aussie who works in the Middle East & Im looking to buy a IP in Australia around the 400k mark that is minimal fuss & hassle, but a good return. I have at least a 20% deposit & loan pre-approval. I was looking around Sydney & Brisbane but open to suggestions & growth areas with high rental demand.

I've not lived in Australia for a while so any help would be appreciated.

Cheers
Craig.
 
Hi Craig,

Almost everywhere in Aust. is in high rental demand and likely to stay that way for a while IMO.

However, I'd pick Sydney over Brisbane at present as Brisbane continues to be be flat and Sydney is still on the up in certain areas after having been flat itself from 2003 - 2008/9.
 
I've been looking at Canberra lately. Canberra and the ACT are almost built out in my opinion and you look at past performance and hands down Canberra grows at about 10 to 12% year. There is a niche way aswell that I've worked out that you can gain an extra 10 to 20% on your yield in Canberra ( what I mean by this is I've worked out how to say lift a yield of 5% up to 5.5 to 6%).

I like certain parts of Sydney too as Propertunity said but with $400,000 maybe only a unit possible where I am thinking.

All the best
 
Capital

I have some 2009-2010 research for all capital cities from an unbiased source if you are interested in some reading material, will present a few ideas around the country for further investigation if nothing else.

In terms of helping with the decision making I suggest working out priorities. If the most important idea is to secure a certain type of property within a fixed budget then the hierachy of decisions will be:

1) Housing type to purchase and budget to spend (Inflexible criteria)
2) Best location to suit (1) (Flexible criteria)

If however you have a firm belief that close to the CBD in the capital of your choice at your fixed budget is your highest priority then you will need to be more flexible on housing type.

1) Close to the CBD Less than 5k perhaps. (Inflexible criteria)
2) Best housing type within budget to suit 1 (Flexible on housing type)

All comes back to what you value and what you are seeking and how you define certain terms such as 'good yield', 'low fuss' and so on.

Also searching on somersoft for suburbs usually reveals forum members who own property there and could provide some personal insight.
 
Television said:
Beebop was/is a forum member who often took a very gloomy approach to property investment and seemed to be of the opinion that it was close to impossible to afford houses/invest on anything but a stellar wage.

Boods was being sarcastic.
Click to expand...

Thanks Television, thought i had said something wrong.

Just to add to my previous post I see author of this thread is from Murrumbateman so you would probably know Canberra quite well. I am told Canberra has also very strong rental demand and rent apparently.
 
Just echoing thoughts from one of the flood threads...(just to clarify, not meaning to offend anyone affected by the floods) could a bargain be had in Bris over the coming months with people having/wanting to sell?
 
There is strong demand for rent In the ACT but you get better yields elsewhere. If I was paying tax & negatively gearing Canberra is a good reliable stable option. You have Unis, gov workers, defence, etc & a solid income with a steady growth record but it can be expensive to buy into. I pay no tax in Qatar so I need a good yield as everything to make up the difference between income & expenses comes out of my pocket.
 
Craiginqatar said:
There is strong demand for rent In the ACT but you get better yields elsewhere. If I was paying tax & negatively gearing Canberra is a good reliable stable option. You have Unis, gov workers, defence, etc & a solid income with a steady growth record but it can be expensive to buy into. I pay no tax in Qatar so I need a good yield as everything to make up the difference between income & expenses comes out of my pocket.
Click to expand...

Craig, can you put a figure on what would be an acceptable yield for you? That would help a lot.

Cheers
 
Hi Craig,

I’m not going to derail your thread but I have quick questions for you. What do you think of the Qatar Pearl development? (I think that’s the name) I’ve done a back of envelope yield estimation and its >10%... also I see a lot of growth potential for Qatar, Dubai style.

From the outside it looks like the Qatar Pearl will be a similar development to the Dubai Marina, where all the expats live and hangout.

You can PM if you want.

Thanks
 
I own an apartment in the Pearl with a good tenant. Right now you could pick up some cheapies if you have the ready cash. Rents have come down in Qatar, but the return is still 7.5% tax free & there is no capital gains tax. Strata & maintenance costs are high, but it is a desirable place to live in Qatar & the apartments & facilities first rate. My tenant loves living there. Certainly as it gets closer to the World Cup 2022 the apartment will go up in value, but not at the moment. I suspect hold until the infrastructure works begin in 5yrs PR longer if you can.

Qatar did not have the uncontrolled development of Dubai & is the worlds largest exporter of LNG, so the financial crisis did not hit so hard here, but it is a buyers market & it did get hit a bit. Prices for apartments are AUD$2800 - 2900 a sqm at the moment on the resale market or much higher from the developer new. The Aussie dollar being so high helps to buy now.
 
Charlie & Kath

Charlie & Kath I need a yield that if I put down a deposit of 25% the rental return covers the vast majority of the expenses. I get no tax deducations for negative gearing as I pay no taxes in Australia due to working in the Middle East so any expenses come out of my pocket, so i want to limit this as much as possible. This is more important now that the Aussie dollar is riding so high and I get paid in USD$.

I will of course get deductions when I claim rent as income, but rental income will not be that high. I don't wish to be paying huge amounts each month.
 
Craiginqatar said:
Charlie & Kath I need a yield that if I put down a deposit of 25% the rental return covers the vast majority of the expenses. I get no tax deducations for negative gearing as I pay no taxes in Australia due to working in the Middle East so any expenses come out of my pocket, so i want to limit this as much as possible. This is more important now that the Aussie dollar is riding so high and I get paid in USD$.

I will of course get deductions when I claim rent as income, but rental income will not be that high. I don't wish to be paying huge amounts each month.
Click to expand...

Craig - if you are interested have a look at the recent thread I started 'Electricity bills slashed thanks to solar - Awesome'. In there I have explained a way that if you buy in the ACT you can get extra yield from installing solar.

With a 25% deposit you would come out pretty much break even I reckon.
 
Have you considered a commercial investment property? Its not hard to find something return 7-8% net and only slightly more difficult to find >8%net return.
It would be much easier to manage from overseas too.

The only issue will be the deposit. You'll need 30% minimum.
 
The Canberra market is reliable and consistent. The low vacancy rates generally ensure your IP will be continually tenanted and the yields aren't too bad either.

I've harped on about it before but Canberra is the only capital city at present that's been rated as a "rising market" in the HTW month in review for January (from memory, it's been the only rising market for the last few months as well).
 
Yes go Canberra. I am a fan of the market and have IP there too.

Rental demands are fantastic and consistent strong rental increases year upon year with ongoing 12 month leases. There is no shortage of the next tenant there who is more than happy to pay decent rent.

The place is also going ballistic with construction work and sprawl, so I can only see very good things for the horizon 5-10 years from now for Canberra. The workers down there get great pay rises year upon year and with all the expansion of the inner CBD going on, the place isn't going to cool off for quite a while I reckon. It has all the criteria for good things to happen yes including limited land supply.
 
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