Palm Cove, Rockhampton, Fortitude Valley, Cairns.....c'mon, where is +ive cashflow?

Hi All,

I've been reading posts and some say Rockhampton is the way to go, others say Cairns, then there's Fortitude Valley. I live in Melbourne and i'm thinking of taking a trip up to QLD, but i don't want to waste my time not finding a single positive cashflow property because i'm simply looking in the wrong town.

Hence, FROM EXPERIENCE can someone tell me where there are positive cashflow properties in QLD. I've been checking on realestate.com.au and i came across a couple of prop's which summed up to be positive in Cairns. What's my best trip to take?...which areas?

Thanks!

Novski
 
Hi Novski,

There are a few places in QLD with positive cashflow properties, the ones I've been looking at are Towoomba, Rocky and Gympie. Ipswich also has a few. let me know if you want examples as I've been working with quite a few agents up there and so have done figures on a lot of places.

timwr
 
Hi Novski,

Arent there positive cashflow properties in country Victoria?

Why have chosen QLD?

Without knowing how experienced/inexperienced you are in property investment, maybe it would be a good idea to concentrate you efforts in the beginning in areas on which you can keep more of an eye. The areas that are cashflow positive today may not necessarily be so in 6 months...

If you have a chance to keep more of an eye on the market, you cut down the chance of making mistakes with the properties you buy.

If you are thinking of taking a trip to QLD, Id advise actually knowing which places you want to look at before lobbing into town :D . Id speak to numerous agents (there are a couple of great agents here on the forum from QLD).

I personally think youve missed the boat with Fortitude Valley - maybe 18 months ago you could have found what you are looking for... That isnt to say there are NO +ve properties, but they are few and far between... I personally have no knowledge of anything further north than that :) So cant help with Cairns etc.

You are also at a disadvantage limiting yourself to QLD from Melb because you can only look at properties on the net/in local papers... My opinion is that the ones who find the truly genuine bargains are the ones who are constantly in the market, speaking to agents, looking at properties.

Without knowing your personal situation and/or investing style, I guess my advice would be this - dont limit yourself to certain areas just because you have heard there are cashflow positive there...

There are also a few other factors involved in your question...

Whether not a property is positive depends on how much of a deposit you put down... So what is positive to you may not be positive for someone else...

There are also people who have the capacity to buy a run down property and immediately add value through cosmetic renovations. This can often take a property that was negative or neutral into positive cashflow territory. If you are buying a property 2000kms away, it would be difficult for you to personally be involved or oversee these renovations.

Take your time in researching areas which match your investing objectives and your goals...

Just a few thoughts,

Jamie :p
 
Dear Novski,

Jamies has given you a good post with some sound advice.

QLD is a great place (and I am allowed to be biased) however starting off in areas closer to home do present less risk.

As a general comment it is important that people that post questions put more into their profile about themselves. Their profile allows others to know such basic things as 1) Which city they live in? 2) What type of investing they do? 3) Have they actually started? and from this information others can give more helpful and constructive posts.

A friend asked myself last night about Cairns and was telling myself that the Mortgage Insurer was refusing to offer mortgage insurance on it. This fact alone sent up warning signals for myself. Areas that have similar characteristics - Gold Coast, Sunshine Coast and Cairns do have two tier marketers operating there. As always do your due diligence - and the further away it is, the more due diligence you should do.

Cheers,

Sunstone.
 
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Hi Novski,

Yesterday I exchanged contracts on a block of units in Rockhampton, my first ip.

These units are +CF, rental return of over $500 pw.

I believe that if you want +CF ip's QLD is the way to go.

Head north young man.

Regards,

Johno
 
Thanks for the replies everyone!

I could have given further details about myself but at this stage i wanted to keep it simple and just ask one simple question and then go from there.

I chose QLD because i've heard there are positive cashflow properties there. I'm sure there are other places too, but at this time i'm looking at reseaching northern QLD.

A 'true' cashflow positive property is one where one puts non of their own money down - the rent covers everything! I'm not saying i'm doing this, but that's true +ive cashflow.

Johno and timwr, is Rockhampton looking at growing, as capital gains are always nice too and i'm obviously taking this into high regard. That's why i'm not looking at country VIC; i can't see capital gains there like i can in say developing Palm Cove. I could be wrong.

Thanks for the precautions Jamie and Sunstone! I don't want to have to renovate.

I'm still keeping my question simple, just looking for +ive cashflow and then keeping in mind potential capital growth....(Property to be around 150k) It doesn't have to be QLD, but that's what i just chose to research. Let me know of any other locations.

Look forward to further news. Thankyou all.

Novski
 
Hi,

There certainly are a few cashflow positive properties in Rocky. To that end, I took a trip there last year to have a look around. Contracted to buy a block of flats, but the finance fell through.

I wouldn't be too put off about going further afield. Its not that hard to 'keep an eye' on an interstate property.

Rocky has been in a slump for a long time, but some capital growth projected because of the new Magnesium mine being built. There is also a shortage of rental properties there.

Watch the older properties as they can stay on the market for quite a while.

Also remember to factor in the rates - they are about $1,000 a year per property/flat which eats into your yield a bit. Frank Brady is a very helpful agent in Rocky. All of the agents there cross list so he can show you properties on other agents' lists.

If you do go up, don't forget to shoot across to Great Keppell for the day!

Good luck

Gail
 
Thanks Gail!

Do you know any more about the Magnesium mine?.. how far is it from Rocky?

Do you know if there is a Uni there?....or any other attractions..

Great Keppell, for property or some sun and surf??...the latter i imagine.

Further information very welcome!

Thanks,

Novski
 
If you want to pos. gear AND get excellent cap. growth in QLD look at the bottom of the market in Morayfield. (Not Caboolture or Burpengary but MORAYFIELD)

Ive got 5 there that have shown 20%-25% growth in the last year and returning 8.5% gross rent.

If your sceptical spend a couple of hundred on a Residex report and look for yourself, they predict 16%+ pa growth for the next 5 years and you should still get 7-9% return if you look hard and negotiate even harder.
 
Hi all,

I live quite close to Rockhampton so I thought I'd list what I knew.
- The new development is a magnesium plant not a mine from my understanding. The plant is called (I think) the Australian Magnesium corporation (AMC) and is being built next to Stanwell power station.

- From my understanding Rockhampton was experiencing negitive growth around two years ago.

- I have heard about a few 'locals' buying investment property in Rocky so maybe that means the ship has passed??

- I'd check to see what the projected rentals after AMC has been built are.... particually if you want to be positively geared.

- Also check Gracemere, it is a town between AMC and Rockie which is only a few minutes out of Rockie and looks quite nice from the highway??
 
Hi Novski

May I suggest that you do a search on Rocky 4700 and 4701 as I have posted some further info on the town previously, which may answer some further questions.

An update on Rocky - one of the meatworks have opened up again.

Keppel Island is a tourist spot. The beachside town of Yeppoon 4703, is 33km from Rocky and is an area experiencing good capital growth at the moment. Alot of people live there and commute to Rocky.
 
Hi

Yes, it is a Magnesium plant at Stanwell. The Aust Magnesium Corp have a website with details. It was up in the air for a while, but I understand its now confirmed as going ahead.

There is also University at Rocky, which ensures a large pool of renters.

I meant jump across to Keppell for some R and R: perfect after a long day of driving around with Frank Brady inspecting properties!

G
 
Thanks Guys!!

Keep the information coming! Does anyone have anymore details about Yeppoon? Given it's seaside the CG i believe will always be good.

Is there anyone with details about Cairns, Palm Cove, P. Douglas?...

Brains, do you know what has changed in Morayfield to bring about this growth...? I went through that area a few years ago and i remember they were building a new freeway down to Surfers. Are there any other forms of development proposed?

Regards,

Novski
 
Hi Novski,

You asked about Palm Cove so I will tell you as much about it as I can. It has just been voted the winner of
Australia's Cleanest Beach!
This should be a real boost for tourism in the area however that does not guarantee that all holiday appartments will benefit from this. We bought 4 months ago a beachfront appartment at Palm Cove but we were very careful in the type of complex and management set up it had. The most important factor for us that it was beach front and it had beach views :D
There is a huge amount of development going on at the moment and I know that the vacancy rate for these 5 star accommodation apartments is very high and ordinary Aussies cannot afford to stay there. WE bought our unit as a lifestyle choice but will definately not be looking at Palm Cove for a positive cash flow property. Prices have gone through the roof in the last few months! I am looking at the other northern beaches for house and land that are near the beach, with the possibility to develop. This includes Clifton beach, Yorkeys Knob, Trinity Beach, Kerrara Beach. There is a University in the region and high demand for student accommodation. All beaches are only 10-20min from Cairns. Hope this has helped Mrs Bird :)
 
Originally posted by Novski
Thanks Guys!!

Keep the information coming! Does anyone have anymore details about Yeppoon? Given it's seaside the CG i believe will always be good.

Is there anyone with details about Cairns, Palm Cove, P. Douglas?...

Brains, do you know what has changed in Morayfield to bring about this growth...? I went through that area a few years ago and i remember they were building a new freeway down to Surfers. Are there any other forms of development proposed?

Regards,

Novski

Lots of infrastructure going in. They are building hospital, uni and major shopping centres going up everwhere, ie: Grace Bros, Westfields, Coles, Woolies..etc.....its probably bigger than its neighbouring sister city Caboolture, if its not it will be soon.

Also its on the freeway on the Brisbane - Sunshine Coast corridor.

And if thats not enough, in my opinion it was way undervalued and starting its growth from a low base so has a lot of catching up to do.
 
ovski,

It's great you're doing your research by asking forumites about the areas you're considering buying in.

I suggest you also do some of your own research via local council & property sites.

Info on facilities such as Unis, new developments & property prices/rental returns are all out there on the web and while I'm sure that you'll get lots of good info from the forum you can ensure you're asking the right questions (or looking in the right areas) by using these alternate research avenues first.

Keep in mind that you are not the first to the party in Queensland, lots of people are in there buying or have already bought in and prices are moving up sharply.

Like Sunstone I'd recommend you look closer to home first & get an understanding of the process & work involved in buying & owning an IP before going so far afield. Also, you need to be clear about your plan - why are you buying, for Cap Growth or Income? What type of IP are you looking for? - the figures on units are dramatically different to those on houses, etc, etc.

I hope your first buy goes well!

Cheers,

Aceyducey
 
Yeppoon 4703

Hi Novski

The Yeppoon area is made up of few different areas, some developed and some not. According to a property value report, the postcode details (last month )are:
House Range $21579 to $895439;
Unit Range $58556 to $337480;
House Median $116000
Unit Median $192000

There is a shortage of rentals around the $160pw price range (according to r e agents). There are not many properties under $150000.

There are flood areas and areas of termites. The shire council staff are very good.

Some of the following re agent addresses also have info on the town of Yeppoon.

Brian Hooper Real Estate - www.cqnet.com.au/~hooper
Cedar Park Realty - www.cedarparkrealty.com.au
Elders Real Estate - www.eldersyeppoon.com.au
L J Hooker - www.ljhooker.com.au
Raine & Horne Real Estate - www.rainhorneyeppoon.com.au
Ray White Real Estate - www.raywhite.com.au
Yeppoon Real Estate - www.yeppoonre.com.au
Emu Park Real Estate First National -www.emuparkrealestate.com.au
Professionals - www.professionals.com.au
Real Choice - www.realchoice.com.au

Of course there's more, but that's some that I have.

According to a valuer, the prices may correct in a couple of years, especially the price of houses on the waterfront, which are quite high at the moment.

Hope that helps.
 
Morayfield

Brains mentions Morayfield as being good value - I'm interested in that area also & wonder what price range and what age your properties are. The returns sound good. Do you have problems getting quality tenants? At the moment there is not much available in the area for rent but I wonder what effect all the new estates springing up in the northern suburbs will have. Does anyone know what the unemployment rate is in that area?
 
Coops,

The vacancy rate in the area is almost non existant which is a good thing. The quality of tenants are ok (not excellent) , i have a good property manager which helps.

These days you have to buy at the bottom of the market to get decent returns (about $130k - $140k) last year the bottom was about $100k - $110k). Its moving that fast.

The houses are standard brick veneer, 3br mostly built about 10 years ago. For something at about $130k - $140k you should get $160-$180/week rent.


I recently recieved depreciation schedules for my properties and im getting about $3500 - $4000 per property per year deductions.

See wayne at www.marsellospike.com.au
 
Hi Brains

Thanks for your prompt reply and the information. What's your opinion of buying new in Morayfield and paying about $190,000 in a decent estate & taking about 6% gross return. Am tempted to go this way as we buy and hold for the long term so want good capital growth and low maintenance for as long as possible. Would you like to recommend your property manager to us as they are worth their weight in gold if you live outside the area.
 
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