Reply: 1.1.1.1.1.1.1
From: Mike .
Hi Tibor,
Due Diligence could also include researching the forum archives or posting for opinions about Logan. I found a few comments about Logan in the archives. Where exactly are your IP's?
I guess it's my gamble, that's where stepping out for the first time is so scary for the average investor...where to buy? But after I'd written my first note I read from someone else who was asking advice a couple of months ago on buying in Logan and they were told that it had high vacancy rates so that scared the pants off me!It seems that all these 'tiered helpers 'are concentrating in the same areas. I would be very interested to see if I ring this woman back she would recommend a house in exactly the same area as my friend! - Novice Housewife 03 Feb 2001
I wouldn't buy in Logan at the moment, its a dog, too many vacancies, however I'm sure someone might pop up and say they are doing fine there, but it's not for me at the moment, there are some much better suburbs in QLD. May I suggest novice Housewife, that your friend who bought in Logan would not be a good source of information, most people try and upbeat their buys by saying how wonderful it is, even if its not doing well. Nobody likes to look like they made a mistake. - The Wife 03 Feb 2001
I had property in Logan Shire back in the early 80's. (There were some nice little pockets) Bought low but after a few years I became concerned at the mass of townhouse being built. I got a bit twitchy on the area and sold out at a bit of a profit. A bit before the market went higher though. [But you never go broke taking a profit ah.] - Gee Cee 03 Feb 2001
The down side to this is...and where to be cautious is...somewhere like Logan right now, its got so many vacancies, its scary. - The Wife 12 Feb 2001
The only thing i noticed was these areas had huge vacancies. - The Wife 31 Oct 2000
I agree, far far too many rental properties, so not a good area to achieve capital growth. In fact property prices having been falling in this area for some years now. (Rental ghetto) BE CAREFUL!! - Steve N 31 Oct 2000
What I've recently learned is that often the higher returns are to offset the LACK of Capital Growth over time. Thus, in some areas of Brisbane (some parts of Logan City) you can buy for $60,000, and rent for $120 per week - and that's 10% return. - Les 21 Nov 1999
I made a residential property investment just under 5 yrs ago after reading Jan's book. I paid $119,000 for a 3-bedroom townhouse in Logan, Qld. About 18 months ago I learned that its value was about $85,000 and it seems it hasn't changed much from that since. I don't know if I paid too much or the value decreased after sale. - Michael S 14 Mar 2000
I know the area first hand - I bought our first home there in 1984 ($44000), then watched as it peaked at around $95,000 in the early 90's. Today it shows as $75000 ....
I'm fairly sure it was Jan (have lent the book, so can't check) that said "an area South of Brisbane" was over developed from 1990 thru 92 (rental shortage initially, followed by a rental glut after they had built hundreds of units). With first hand knowledge, it "stuck out" (to me) that she was referring to Logan City.
And check the rents being received - I have a rental in Logan that is receiving $150/wk - which is around $645 per month - and mine is a 15 year old house, not a new town house. Maybe you could be doing better with the rents (or maybe you need a new RE agent????).
At the end of the day, it is difficult to get a negative return in Logan - so take a close look at how things are structured in your case (above points). At least you can them minimise the pain while you wait for the value to grow. - Les 15 Mar 2000
The ONLY caveat I have on the whole scenario is the ACTUAL area - there are SOME areas of Logan that might reflect Adam's "proportional difference" story. Some areas of Logan won't come right in the next 10 years (in my opinion) but they are small in number. But meantime, the cashflow SHOULD be positive, even with a $120k purchase price.
And even though the purchase price sounds high, some parts of Logan are potentially VERY GOOD areas. If his purchase is in one of those, he could end up selling out (with associated costs) JUST IN TIME to see the whole area jump in value. - Les 17 Mar 2000
One of my favorite ideas from the seminar (and there were many). Robert suggested that the opposite of financial intelligence was financial insanity. It is insanity was to confuse opinions with facts. He said Rich Dad taught him that everything in a liability column was a fact and everything in the asset column was an opinion. So if your IP is "worth" $200K but it drops in value the fact is that you still owe your original debt to the bank (as many people discovered in Logan). It is financial insanity to take an opinion and believe it is a fact. - Andrew G 15 April 2000
In short any time that I have dumped a DOG of a property some other better property has come up. I had two houses in Kingston (Logan Shire) in the mid 80's. After noting the amount of houses and units being built in the area I dumped them both and came out with a slight overall loss. - Gee Cee 16 Apr 2000
I know of Logan City (South of Brisbane) houses able to be purchased for around $60k, with rents of $120 - $130; how does that sound? - Les 2 May 2000
Now suppose I have leapt to an enormous assumption here and David HAS found a bargain house on a detached block within 10 k's from the city (of Brisbane- not Beenleigh or Logan!!) then I will apologise profusely. Please dont tell me its a townhouse in that centre of capital gain - Woodridge - (lie, if you have to, David so I can still respect you tomorrow) - Will 3 June 2000
Crestmead is one of the half-decent suburbs of Logan City. I believe there is more sub-division going on around there (mainly because one "mob" wanted to sell me a "brand-spanker" for some outrageous price). There is NO shortage of land in/around that area - heaps of farming land and acreage blocks just a Km or two South (and North, around 3rd Ave).
I own one IP in Crestmead - 700 sq. m. and land value around $35,000 (I think - need to check the Rates notice). My property is an older hi-set in a quiet street - around 9% rental return. No trains within Cooee, so buses only. Some light industry close by (for jobs) but not too close. No major shopping in Crestmead - although I saw some evidence of possible future growth in retail outlets right on the Southern end (before you start driving by cows) - so maybe in the future? Schools, yeah - graffiti, not much (if at all) - vacancy rate ?? (I had mine rented from day one) - new prices, I don't know, but with so much land nearby, and with the Rateable values so low, I wouldn't want to pay too much. I haven't checked new prices, because, like cars, I don't want to buy new.
There are certainly far worse areas of Logan - this is generally pleasant - but I can't see huge Capital Growth in that area for some time (especially if buying new !!! the developer grabs a chunk of your future growth typically, doesn't he??). If buying, for pete's sake make it at least a decent hunk of land - it seems developers are building on 400 sq. m. these days - so at least buy an average block (700 sqm) so it has SOME chance of Capital Growth into the future.
Helen, keep in mind that I am currently working in Sydney, but lived near (3Km) Crestmead for the last 16 years (even before Crestmead existed!!!). So, I'm NOT up to date with the area (in Sydney 18 months so far). Even if sketchy, I hope it helps. - Les 7 Jun 2000
Helen, Keep looking. You can do better than Crestmead. The Logan area is the Tasmania of Qld. Sorry again Tassie. - Will 7 Jun 2000
If you want to try around the Logan area without living dangerously, look at the suburbs to the east of the SE Freeway / Gateway Arterial Freeway. Try Shailer Park or other suburbs close-ish to the Logan Hyperdome. Steer well clear of the suburbs to the West of the freeway. - Pierre 7 Jun 2000