Hi guys,
I hope you are all well. I haven't been able to contribute as actively as I would like, as I've been doing a lot of overseas travel for work and have taken on a new role with keeps me time poor unfortunately. I've just gone unconditional on this property "the Aqua Blue Ugly Duckling".
In terms of a brief background on myself, I've just turned 25 and this purchase is Property #4 in my individual portfolio and #6 in my joint portfolio with my long term partner (soon to be fiance, if she says yes!). My journey has been well documented on the forum, and links to my initial three property discussion threads can be found below:
* Property 1. 2 bedroom unit, St Marys NSW:http://somersoft.com/forums/showthread.php?p=1048574#post1048574
* Property 2. 2 bedroom townhouse, Waterford West, QLD:http://somersoft.com/forums/showthread.php?p=1135957#post1135957
* Property 3. 3 bedroom house, Waterford West, QLD "the Green Ugly Duckling": http://somersoft.com/forums/showthread.php?p=1205448#post1205448
I know seeing young investors achieving success certainly motivated me in the very early stages of my journey, so hopefully one day others can track my story and gain some inspiration to take action themselves.
So...
The Property:
* 3 bedroom single storey brick veneer house in Gailes, QLD (Ipswich City Council)
* Built in 1977; with 1 bathroom and 1 carport on a 607sqm corner block. Two street frontage with access on both sides. Plenty of street parking as well.
* Hardwood timber floors with combined L shape lounge/dining
* Walking distance to shops and easy access onto M2 motorway
* Walking distance to Carole Park State School (Primary), Brisbane Youth Education and Training Centre (Combined), St Francis Xaviers School (Primary-Catholic) and Camira State School (Primary).
The Numbers:
* Purchase Price: $214,500
* Tenant lined up at $310pw (day one yield of 7.52%) - moves in day after settlement
* 90% LVR + LMI capitalised - total loan: $196107.56 from AMP at 4.70% = Monthly repayments of $768.09
* Other expenses: Council & water rates (233.33pm or $52.85pw), Building & Landlord Insurance ($114.75pm or $15.90pw), and Property Management fees ($91.00pm or $21.00pw at 7% inc GST).
Total Cash Flow Pre-Tax:
Income: $1333pm based on $310pw rent
Expenses: $1161.33pm based on $268.00pw expenses (loan repayments/council + water rates/building + landlord insurance/property management fees)
= +$182.00pm or +$42.00pw
No renovation required - just need to replace some taps in the bathroom. Can always come back and paint the internals/externals and polished the floorboards over time if need be.
Rationale behind the Purchase:
Firstly, the rationale was not so much location based, but more value based. I've been doing a lot of research in the SE QLD area and have found that the Logan City Council area has been a little hot for my liking with too many NSW investors and potentially the start of Mum & Dad investors starting to penetrate the market. This has driven the market upwards and in my eyes, the value is starting to be better elsewhere. As Logan continues to climb and yields drop, many people (in particular PPOR buyers) will be priced out of that respective LGA, and will head West to the Ipswich LGA where they can still be 25km outside of the Brisbane CBD and buy 3 bedroom houses for sub $230-240k which require no work. The yields for investors are also attractive, with the potential for 7%+ day one with strong negotiation and knowing the market.
My estimation of the market value of this property, to be approx $225-235k.
Given where my portfolio is at currently, #4 had to be a combination buy of short to medium term CG with strong cash flow. The property is CF+ from day one, and bought under market value. The strategy moving forward for this property is to set and forget and revalue in 12-18 months time. I?ll be ready to commence the search for #5 in my individual portfolio in June, which will be a pure equity play to be pigeon paired to this property.
I?ll put some updated pictures up in the next post. Thanks again to Right Property Group for their assistance with this deal.
Happy investing,
Nixba.
I hope you are all well. I haven't been able to contribute as actively as I would like, as I've been doing a lot of overseas travel for work and have taken on a new role with keeps me time poor unfortunately. I've just gone unconditional on this property "the Aqua Blue Ugly Duckling".
In terms of a brief background on myself, I've just turned 25 and this purchase is Property #4 in my individual portfolio and #6 in my joint portfolio with my long term partner (soon to be fiance, if she says yes!). My journey has been well documented on the forum, and links to my initial three property discussion threads can be found below:
* Property 1. 2 bedroom unit, St Marys NSW:http://somersoft.com/forums/showthread.php?p=1048574#post1048574
* Property 2. 2 bedroom townhouse, Waterford West, QLD:http://somersoft.com/forums/showthread.php?p=1135957#post1135957
* Property 3. 3 bedroom house, Waterford West, QLD "the Green Ugly Duckling": http://somersoft.com/forums/showthread.php?p=1205448#post1205448
I know seeing young investors achieving success certainly motivated me in the very early stages of my journey, so hopefully one day others can track my story and gain some inspiration to take action themselves.
So...
The Property:
* 3 bedroom single storey brick veneer house in Gailes, QLD (Ipswich City Council)
* Built in 1977; with 1 bathroom and 1 carport on a 607sqm corner block. Two street frontage with access on both sides. Plenty of street parking as well.
* Hardwood timber floors with combined L shape lounge/dining
* Walking distance to shops and easy access onto M2 motorway
* Walking distance to Carole Park State School (Primary), Brisbane Youth Education and Training Centre (Combined), St Francis Xaviers School (Primary-Catholic) and Camira State School (Primary).
The Numbers:
* Purchase Price: $214,500
* Tenant lined up at $310pw (day one yield of 7.52%) - moves in day after settlement
* 90% LVR + LMI capitalised - total loan: $196107.56 from AMP at 4.70% = Monthly repayments of $768.09
* Other expenses: Council & water rates (233.33pm or $52.85pw), Building & Landlord Insurance ($114.75pm or $15.90pw), and Property Management fees ($91.00pm or $21.00pw at 7% inc GST).
Total Cash Flow Pre-Tax:
Income: $1333pm based on $310pw rent
Expenses: $1161.33pm based on $268.00pw expenses (loan repayments/council + water rates/building + landlord insurance/property management fees)
= +$182.00pm or +$42.00pw
No renovation required - just need to replace some taps in the bathroom. Can always come back and paint the internals/externals and polished the floorboards over time if need be.
Rationale behind the Purchase:
Firstly, the rationale was not so much location based, but more value based. I've been doing a lot of research in the SE QLD area and have found that the Logan City Council area has been a little hot for my liking with too many NSW investors and potentially the start of Mum & Dad investors starting to penetrate the market. This has driven the market upwards and in my eyes, the value is starting to be better elsewhere. As Logan continues to climb and yields drop, many people (in particular PPOR buyers) will be priced out of that respective LGA, and will head West to the Ipswich LGA where they can still be 25km outside of the Brisbane CBD and buy 3 bedroom houses for sub $230-240k which require no work. The yields for investors are also attractive, with the potential for 7%+ day one with strong negotiation and knowing the market.
My estimation of the market value of this property, to be approx $225-235k.
Given where my portfolio is at currently, #4 had to be a combination buy of short to medium term CG with strong cash flow. The property is CF+ from day one, and bought under market value. The strategy moving forward for this property is to set and forget and revalue in 12-18 months time. I?ll be ready to commence the search for #5 in my individual portfolio in June, which will be a pure equity play to be pigeon paired to this property.
I?ll put some updated pictures up in the next post. Thanks again to Right Property Group for their assistance with this deal.
Happy investing,
Nixba.
Last edited: