Looking in Brisbane to purchase my first IP

Hi guys,

I'm about to purchase my first IP!
My budget is $400K and I'm looking to buy within the 10km ring of Brisbane. I'm from Sydney so I don't know too much about the area and making my first trip up to Brisbane this Saturday to check out some properties.
The main areas I've been researching are:
- Annerley/Greenslopes/Coorparoo area
- Hawthorne/Morningside area
- Paddington area

One of my concerns was that many of these properties that came within my budget looked quite old - 1970/80's, and was worried with so much development going on in these areas that an old property would be hard to tenant and may lack capital growth in the future.
Also, what are your thoughts on purchasing a newer one bedder in any of these areas? I'm looking to buy and hold for the long term and looking for capital growth that also have a yield of 5% or more.
Basically, with my budget I could purchase an old 2 bedder in these areas or a newer 1 bedder. What do you think would have the better long-term capital growth, demand and yield? Is there much difference or am I just over thinking the issue?
Any advice would be much appreciated!
Many thanks,

Taku
 
Hi Taku

An older style 2 bed will possibly do better than a newer one bedder.

I note that you are from Sydney inner west.

One bedders are more common and accepted in Sydneys older inner burbs than similarly in brissie

ta
rolf
 
Hi Taku,
If it is just for pure investment purpose, in general with 400K I personally would buy a house a bit further (15K isk ) close to train or busway, rather than a 1 or 2 bed unit.
I did buy old 2 bed units in the inner ring of Bris a while back, stil have them, but if I could do it again I would buy houses a bit further (with same amt of money) instead.
And yes as Rolf has said, 2 bed old is beeter than 1 bed new.
Of course it depends a lot on what works best for your personal situation.

My 2c.
 
Hi Taku,
If it is just for pure investment purpose, in general with 400K I personally would buy a house a bit further (15K isk ) close to train or busway, rather than a 1 or 2 bed unit.
I did buy old 2 bed units in the inner ring of Bris a while back, stil have them, but if I could do it again I would buy houses a bit further (with same amt of money) instead.
And yes as Rolf has said, 2 bed old is beeter than 1 bed new.

I would agree with Chilli here. I've got friends and family who bought units (old and new) who bought units close to Brisbane CBD, Gold Coast CBD and Melbourne CBD who haven't done very well long term,.
 
Hi Taku,
If it is just for pure investment purpose, in general with 400K I personally would buy a house a bit further (15K isk ) close to train or busway, rather than a 1 or 2 bed unit.
I did buy old 2 bed units in the inner ring of Bris a while back, stil have them, but if I could do it again I would buy houses a bit further (with same amt of money) instead.
And yes as Rolf has said, 2 bed old is beeter than 1 bed new.
Of course it depends a lot on what works best for your personal situation.

My 2c.

Chilli and Nth Brisbanite,
Thank you for your advice.
In that case, is there any particular suburbs you'd suggest I start looking in?
Would there be preference between north and south or even maybe looking towards the coast?
Many thanks.
 
Units can be good, if you purchase well, we've made 100k on one by buying well and at the right time, then adding another bedroom.
I would definitely stick with a house as the room for error is less.
North Brisbane, deals can be found, especially off the back of failed contracts.
 
Units can be good, if you purchase well, we've made 100k on one by buying well and at the right time, then adding another bedroom.
I would definitely stick with a house as the room for error is less.
North Brisbane, deals can be found, especially off the back of failed contracts.

Thanks Zimby.
All signs are leaning towards a house a bit further out.
Will have to start looking in other areas.
Anyone have thoughts on Taigum?
There seems to be a couple listings for 3 bedroom homes around the 400K mark and a lot of townhouses around $350-400K.
What's your thoughts on newish townhouses around this area?
Potential for growth in the short-medium term?
 
Thanks Zimby.
All signs are leaning towards a house a bit further out.
Will have to start looking in other areas.
Anyone have thoughts on Taigum?
There seems to be a couple listings for 3 bedroom homes around the 400K mark and a lot of townhouses around $350-400K.
What's your thoughts on newish townhouses around this area?
Potential for growth in the short-medium term?

Why would you buy a townhouse for almost the same as you can buy a house?
I bet you in 20 years the house - well the block of land (assuming around 600sqm) will be worth heaps more , maybe double
 
Yep, I'm with Strongy.
Not only that but the body corporate kills cash flow.
Remember to negotiate, look for the listings that have no open's these are usually the ones under contract, but not unconditional.
Ring the agents and ask to be put on the call list if finance fails.
I've had 10 pls emails/txt's calls in the last 4 weeks with contracts that have failed.
Once the listings go stale property interest dies very quickly.
speak with the agent, ask what it went under contract for.
Usually they won't tell you, but reactions to price mentions is a good way to get a price.
offer less and hope they take the offer :)
 
This thread is helping answer a question I've been searching for.. 2 bedder close to CBD or house with land further out, unfortunately though I'm looking at the low to mid 300k which restricts me to houses much further out than Taku's 400k. I have made some calls to buyers agents & they all give roughly the same advice, stay within 10-15k of the city & as soon as i mention Logan it's "I would't touch that place with a stick", that hasn't deterred me too much as invested in western Sydney a couple years back & have done well there. Although it does look like Logan prices have come a long way back & bargains are hard to be had.

So with the low budget in mind would you then say I'm better off with the 2 bedder closer to the city which is all I could afford or be much further out for something decent? It may be back to the location drawing board, I may open up another thread whether regional Ballarat may be a better option that the hot Brisbane market.
 
As i keep researching for where to invest I came across this video from John Lindeman with his predictions for the Capital cities around Aus:

http://www.youtube.com/watch?v=KXeDFRXnZ40

As you can hear he is not overly convinced Brisbane will be the booming market that everyone else predicts it to be, the discussion sways you more towards houses as the better investment (6min:40 mark) as opposed to a possible oversupply of units but mainly that pricing is likely to be kept lower due to the proximity to the oversupplied underperforming gold coast (10min:30 mark). Of course this is general & wouldn't relate to every single house or unit as we know those experienced investors can get themselves a solid investment in any market. Let the research continue :)
 
I wouldn't write of units based on some people not making money with their purchases previously, if you buy the right stock based on solid fundamentals you can still do well buying units. I've bought units and houses in Melbourne and Sydney and the units have kept up CG wise at a much lower entry cost and less maintenance issues.
 
I used to favour units over houses for quite a few reasons e.g lower buy in costs to buy more and spread risk, lower costs lets you buy closer to cbd, higher yields, lower maintenance and net yield after factoring in bc fees, change in demographics with younger generations wanting to live close to cbd.. And many more reasons..

But now there is such an oversupply I can't see demand catching up for a long time.. There are high vacancy rates across the board in brisbane but more so with units.. While some blue chip houses may be getting discounted $10/week, I've heard inner city units can be discounted up to $100/week :eek:
 
I used to favour units over houses for quite a few reasons e.g lower buy in costs to buy more and spread risk, lower costs lets you buy closer to cbd, higher yields, lower maintenance and net yield after factoring in bc fees, change in demographics with younger generations wanting to live close to cbd.. And many more reasons..

But now there is such an oversupply I can't see demand catching up for a long time.. There are high vacancy rates across the board in brisbane but more so with units.. While some blue chip houses may be getting discounted $10/week, I've heard inner city units can be discounted up to $100/week :eek:

Sure if you buy one of those shiny ones with lifts and pools right near the CBD I can see that. On the other hand, a boring and ugly brick unit in a small block will still be fine and it would be hard to see rent drop by $100.

I've just had a look and you can get one of those units in the inner city for less than 300k with a yield not much less than 6%. It's actually a better yield than what you can get for a similar product 40km from the Sydney CBD.
 
Hi Taku,
If it is just for pure investment purpose, in general with 400K I personally would buy a house a bit further (15K isk ) close to train or busway, rather than a 1 or 2 bed unit.
I did buy old 2 bed units in the inner ring of Bris a while back, stil have them, but if I could do it again I would buy houses a bit further (with same amt of money) instead.
And yes as Rolf has said, 2 bed old is beeter than 1 bed new.
Of course it depends a lot on what works best for your personal situation.

My 2c.

If it cost the same, would you buy 1 smaller block house close to Brisbane CBD, eg: Fairfield/Holland Park, or 2 larger block houses further out, eg: Logan, And why?
 
If it cost the same, would you buy 1 smaller block house close to Brisbane CBD, eg: Fairfield/Holland Park, or 2 larger block houses further out, eg: Logan, And why?

I used to always go for inner city suburbs as my belief was better capital gain if closer to city.
Now I am not sure that this is true if you invest for the long term.
Over the years I see in the long run they all go up and if you do good research buying in the up-coming burbs , close to transport then it may be even better.

And also

Buy 2 you make your portfolio a bit more "liquid", if you need to sell, can sell 1 a year and minimise income tax paid on capital gain.
Buy 2 you reduce the income risk (chance of not able to find tenant for both houses is less than if one house).

Only my personal opinion, please read other views on this excellent forum and make decision based on your personal circumstances and goals.
 
Sure if you buy one of those shiny ones with lifts and pools right near the CBD I can see that. On the other hand, a boring and ugly brick unit in a small block will still be fine and it would be hard to see rent drop by $100.

I've just had a look and you can get one of those units in the inner city for less than 300k with a yield not much less than 6%. It's actually a better yield than what you can get for a similar product 40km from the Sydney CBD.

Yes agreed.
Those old inner city solid brick 6 or 8 pack units have a good % of associated land and low corp fee, are still good value now.
Units in highrises with no characters are different stories.
 
Sure if you buy one of those shiny ones with lifts and pools right near the CBD I can see that. On the other hand, a boring and ugly brick unit in a small block will still be fine and it would be hard to see rent drop by $100.

I've just had a look and you can get one of those units in the inner city for less than 300k with a yield not much less than 6%. It's actually a better yield than what you can get for a similar product 40km from the Sydney CBD.
I agree the older style blocks provide much better value than the new. My point is the oversupply of new units is (and will continue) to affect the demand on the older. There's only a finite number of renters. Rents have dropped slightly and the situation is not going to get any better.. Only worse.
 
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