Starter investor seeking advices for investing apartments

Hey guys. I have just registered this forum and I?m very new to property investment. I want to ask for advices from you experienced investors about investing an off plan apartment in Brisbane. planning settle date is middle 2017

The reason that I ask about this topic is because a friend of mine (not close), who is also a property sales was trying to sell me this off plan apartment in Newstead Brisbane. I live in Sydney however I think properties in Sydney now are too high for investment. Brisbane looks like a better choice but I can only invest on units because I cannot travel to Brisbane from time to time to inspect houses.

The reasons my friend stated that Newstead is good to invest are as follows:
Bank of Queensland moved their HQ to Newstead. Also the Gaswork area is set to carry on a big renewal project by the government and some other corporations are moving here too. It should bring more people to work in this area who will potentially rent/buy a property in this area. Also the transportation here is good and good shopping malls nearby.

This suburb reminds me Zetland/Green Square in Sydney. I have a friend who bought a two bed room off plan apartment for 690,000 at the beginning of 2012 and sold it for 850,000 or 870,000 when it was settled Dec/2014. That is 160,000 capital gain with 70,000 cash. Wondering if similar case can happen to Brisbane.

Newstead is marked as High risk on Brisbane flood area map, will this be an important factor to not to buy the property? Also, generally should I invest a one bedroom or two bed rooms in this type of property?

I did a rough calculation looks like if both the yield return and loan interest is 5%, the rent income and loan interest can make an even (because I need to spend 8% of rent income to agents since I live in Sydney). Then I think the only way to make money from this investment will be from capital gain.

I see most people are saying to avoid units in inner city I wonder if it is the same case for this one in Newstead? What are the bad things to invest such a property here?

To be honest I don't know much about property investment before. Everyone please go easy on me  but please correct anything I mentioned in this post and shed some light on this topic. thanks in advance.
 
I can't comment on whether or not you should buy this specific property - you'll need to do your own due diligence on this property first.

What I can advise you on, is to not rush into this. The 'buying' part of the property investment equation should consume no more than say 10% of your time. Being your first, you ought to spend months doing due diligence (suburb research, statistics, flood maps, so many elements). You shouldn't even be looking at any actual dwellings until your research has led you digitally, to the right suburb and even target streets.

Might I also add that you should go visit any established property you are buying before you buy it! Off the plan is different of course but even then, some on-foot research on the area/site would be my advice.

As for Newstead itself, I spend a lot of time there with work. It has some great drivers, but with it, a higher risk of people overpaying for properties.
 
Hey guys. I have just registered this forum and I?m very new to property investment. I want to ask for advices from you experienced investors about investing an off plan apartment in Brisbane. planning settle date is middle 2017

The reason that I ask about this topic is because a friend of mine (not close), who is also a property sales was trying to sell me this off plan apartment in Newstead Brisbane. I live in Sydney however I think properties in Sydney now are too high for investment. Brisbane looks like a better choice but I can only invest on units because I cannot travel to Brisbane from time to time to inspect houses.

The reasons my friend stated that Newstead is good to invest are as follows:
Bank of Queensland moved their HQ to Newstead. Also the Gaswork area is set to carry on a big renewal project by the government and some other corporations are moving here too. It should bring more people to work in this area who will potentially rent/buy a property in this area. Also the transportation here is good and good shopping malls nearby.

This suburb reminds me Zetland/Green Square in Sydney. I have a friend who bought a two bed room off plan apartment for 690,000 at the beginning of 2012 and sold it for 850,000 or 870,000 when it was settled Dec/2014. That is 160,000 capital gain with 70,000 cash. Wondering if similar case can happen to Brisbane.

Newstead is marked as High risk on Brisbane flood area map, will this be an important factor to not to buy the property? Also, generally should I invest a one bedroom or two bed rooms in this type of property?

I did a rough calculation looks like if both the yield return and loan interest is 5%, the rent income and loan interest can make an even (because I need to spend 8% of rent income to agents since I live in Sydney). Then I think the only way to make money from this investment will be from capital gain.

I see most people are saying to avoid units in inner city I wonder if it is the same case for this one in Newstead? What are the bad things to invest such a property here?

To be honest I don't know much about property investment before. Everyone please go easy on me  but please correct anything I mentioned in this post and shed some light on this topic. thanks in advance.

2012-2014 Sydney market had double digit growth.. it may (won't) not be the case for 2015-2017.

OTP has three major issues:

Builders and developers drama
short valuation.
opportunity cost.

why not buy something with 10% deposit now? if suits, pick up a small development your self
 
if you go in just with the goal of selling upon completion, you're basically betting that the market will go up in the short term.

Ensure that you can hold the property even if you can't make a profit from selling in 2 years and then assess whether it is still a good investment.
 
In your holding equation you should also include the strata fees and it might have 2-3 weeks without tenants. Rental return also varies from supply and demand.
 
Newstead

I wouldn't count myself as very experienced but I can offer some pointers. I too am from Sydney and I have bought an OTP apartment in Newstead - settling later this year.

I like the gas works area, I walked around it quite a bit - plus the local streets. These areas are getting more street activation plus they are close to dining, entertainment, transport, boutique shopping (James St and Emporium), Woolworths at gas works and employment opportunities.

Having said this, there is a lot of development and with that comes choice - so do your homework, get really clinical and compare price per sqm for example. Also avoid going with a generic apartment type - look for something a bit different that will appeal to a tenant and future owner.

I think the best building I've seen in that area is Kurv - I didn't invest in it because it sold out before I started my search.

Don't count on flipping your OTP apartment for a huge profit I can't see it happening with the amount of development. However, I do think that steady growth for a good sized and well located apartment is a reasonable expectation of this area.

Avoid apartments that are <50 sqm living space (don't count the balcony in that), some lenders won't finance you.

I would advise getting one with a car park, even though the marketers will crap on about not needing one for various reasons, I think it will limit your tenant pool and saleability.

Oh yeah, be aware that Ann St is a busy, noisy road and so is the intersection at Ann St and Commercial Rd. Personally I'd avoid those spots. There are better locations in Newstead.

Also, have a look at near new buildings such as Mosaic and M&A - just for a comparison. Both those buildings have good access to the shopping and dining precinct on James St.

Trev
 
I did a rough calculation looks like if both the yield return and loan interest is 5%, the rent income and loan interest can make an even (because I need to spend 8% of rent income to agents since I live in Sydney). Then I think the only way to make money from this investment will be from capital gain.

Uh..... you forgot the body corp......allow $3,000 to $5,000 per year depending on what the place has....

And work on 48 week per year rent just to be on the safe side

The Y-man
 
Be mindful that the property will be valued upon completion and it may come in under purchase price. You will have to make up the difference yourself so make sure you have a buffer available pre settlement or you will risk loosing your hefty deposit. The developer can come after you for the difference if sold to another buyer at a loss as well as marketing costs.

Your friend is probably pushing the "buy at todays price and reap the equity gain when its finished in x number of months/years". Ask him if you can purchase subject to an acceptable valuation on completion? They will say no and then ask why not since a minute ago you where so sure it was going to be worth more :p
 
5% rental yield and 5% interest also doesn't factor in what would most likely be significant amounts of depreciation to be claimed in the early years.
Either way I would take your time and look for comparable sales and try not to rush your decision
 
Uh..... you forgot the body corp......allow $3,000 to $5,000 per year depending on what the place has....

Normally starts of low the first year and jacked up thereafter as these complexes need a large sinking fund to well, stop it from sinking as the building ages.
 
Hey guys. I have just registered this forum and I?m very new to property investment. I want to ask for advices from you experienced investors about investing an off plan apartment in Brisbane. planning settle date is middle 2017

The reason that I ask about this topic is because a friend of mine (not close), who is also a property sales was trying to sell me this off plan apartment in Newstead Brisbane. I live in Sydney however I think properties in Sydney now are too high for investment. Brisbane looks like a better choice but I can only invest on units because I cannot travel to Brisbane from time to time to inspect houses.

The reasons my friend stated that Newstead is good to invest are as follows:
Bank of Queensland moved their HQ to Newstead. Also the Gaswork area is set to carry on a big renewal project by the government and some other corporations are moving here too. It should bring more people to work in this area who will potentially rent/buy a property in this area. Also the transportation here is good and good shopping malls nearby.

This suburb reminds me Zetland/Green Square in Sydney. I have a friend who bought a two bed room off plan apartment for 690,000 at the beginning of 2012 and sold it for 850,000 or 870,000 when it was settled Dec/2014. That is 160,000 capital gain with 70,000 cash. Wondering if similar case can happen to Brisbane.

Newstead is marked as High risk on Brisbane flood area map, will this be an important factor to not to buy the property? Also, generally should I invest a one bedroom or two bed rooms in this type of property?

I did a rough calculation looks like if both the yield return and loan interest is 5%, the rent income and loan interest can make an even (because I need to spend 8% of rent income to agents since I live in Sydney). Then I think the only way to make money from this investment will be from capital gain.

I see most people are saying to avoid units in inner city I wonder if it is the same case for this one in Newstead? What are the bad things to invest such a property here?

To be honest I don't know much about property investment before. Everyone please go easy on me  but please correct anything I mentioned in this post and shed some light on this topic. thanks in advance.


Your thinking is pretty spot on so don't second guess yourself. The Newstaed market is alsomst guaranteed to be overbuilt. But the prices will keep rising. So make sure you can be happy with slightly lower rental yield. Another problem is apartment choice. Those have been picked over pretty heavily. You can get a better position in a new development if you are early and off the plan.

I know of a CBD project where there is still good choice

Cheers, Jerry
 
2 Bedroom $625,000
1 Bedroom $414,000 (the cheapest one)

If I can get a carpark on the $414,000 1 bedder , I am buying it myself.

You can PM me if you want

Bit pricey for Brisbane imo.. agree with Candice, lots other option out there , and will personally look at investing somewhere else.
 
You may have the budget to buy a house a little further out. Properties can be found in areas with low vacancy rates that are cash-flow positive.

Also - try to meet and network with like-minded investors. You will learn a great deal and can bounce ideas off each other.

I went to the forum meetup that was held 25 March at Wentworthville. I am a new investor to. It was great to meet some successful investors and I learnt a great deal.
 
These apartments are in Queens Street Bris CBD. They sound pricy but the location is the equivalent of Pitt St Sydney. The rental for the one bedder will be 500 pw, and the car park can rent separately for 100 per week.

I also expect a capital gain before the 2017 settlement. That is the strategy anyway.

The 2 BR will have to rent for more and same deal with the car park.

It is not a huge cash flow, but the location will give capital gain , and liquidity should I want to sell.
 
These apartments are in Queens Street Bris CBD. They sound pricy but the location is the equivalent of Pitt St Sydney. The rental for the one bedder will be 500 pw, and the car park can rent separately for 100 per week.

I also expect a capital gain before the 2017 settlement. That is the strategy anyway.

The 2 BR will have to rent for more and same deal with the car park.

It is not a huge cash flow, but the location will give capital gain , and liquidity should I want to sell.

Sounds like you are trying to sell them ;)
 
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