260 K for IP

Discussion in 'Where to Buy' started by rook2017, 15th Feb, 2020.

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Where to buy - $260 limit

  1. Perth suburbs

    37.5%
  2. Brisbane suburbs

    45.8%
  3. Townsville, QLD

    8.3%
  4. Traralgon, VIC

    8.3%
  1. rook2017

    rook2017 Well-Known Member

    Joined:
    15th Mar, 2017
    Posts:
    137
    Location:
    VIC
    Hi All,

    Just got an advice from my new banker that I can search for a property valued up to $260K returning up to $350/week. Of course, not ideal, but a year ago I was told by ANZ (my old bank) that I would not be able to afford another IP, however after finding a new financial institution I was able to buy a new IP which has since went up in value. I want to keep going (Note: all my investments are currently in Melbourne suburbs).

    So, I have started reading and looking at properties in suburbs around Perth (WA), Townsville (QLD) and Brisbane greater region. I am also considering regional Victoria and buy in Traralgon, but I d' prefer to buy interstate.
    I do not have much knowledge about WA and QLD, as my primary focus was always Melbourne. Having reached my ceiling at this point of time, I'd rather keep investing/buying while I can even in newer areas/markets for me. My preference is a house, but would also consider a unit in a good location.

    Thanks for reading and I would appreciate your knowledgeable advice on those areas.
     
  2. Todd

    Todd Well-Known Member

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    Canberra
    Do you need to limit yourself to these 4 places? To get this yield and this buy in price it would have to be regional. Have a look at Mildura and Orange (do a search there are comments on these places). Mildura you would get $300/week at 250k price point. I don’t mind Traralgon, seems to be at the start of a bit of an upswing but that may be short lived. Townsville has been tipped by many over the years but has done nothing. Perth could be a few years away and yields are poor. Would have to go to Logan in Brissy area at this price point(do a Logan search for more info).
     
    rook2017 likes this.
  3. rook2017

    rook2017 Well-Known Member

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    Thanks @Todd for the advice. I have actually also looked at Mildura.
     
  4. Shogun

    Shogun Well-Known Member

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    from the Perth 2020 thread. I probably wouldn't but that is pretty good return

    How long do you plan to hold for?
    Buying (stamp duty) and selling cost thousands.
    Land and water rates are a few thousand. Say $2500 a year
    If rent at $300 a PM in Perth is $1500 to $2000 per year
    Smoke detector checks $100
    EBM etc $300 a year
    $250K at 3.5% $8700 per year.
    Maintenance $500+ per year
    The older the house the less deprecation allowed
    above is about $260 a week costs

    Will you really make money off a cheap house?

    Most "cheap" areas are cheap for a reason. Tenants can be an issue.
    High yield and good capital growth prospects often don't go together.
     
    Ketsle likes this.
  5. Ketsle

    Ketsle Well-Known Member

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    I thought they changed this so that you cant claim any depreciation on 'second hand'/established houses? Regardless of age
     
  6. Shogun

    Shogun Well-Known Member

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    Perth
    A depreciation company told me I could last week. A ten year old house has a lot left to depreciate apparently
     
  7. jitendra shingrupe

    jitendra shingrupe New Member

    Joined:
    15th Feb, 2020
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    Location:
    Melbourne
    I am new and considering below suburbs

    Morewell
    Moe
    Bendigo and around
    George town tas

    Pls let me know wht u think
     
  8. The Grinch

    The Grinch Well-Known Member

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    Cairns
    Why have you picked these markets? What is your budget? Have you spoken to a broker to see your borrowing power? What are your long term plans?

    Simply targeting low entry point houses in regionals may be appealing so you can get your foot in the door but keep in mind they are cheap for a reason. Most of the places you have mentioned are quite volatile markets that require a different strategy then a typical buy and hold.

    Bendigo would be the best bet out of the mentioned towns, do a quick search as there is a thread already on bendigo.
     
  9. jitendra shingrupe

    jitendra shingrupe New Member

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    Location:
    Melbourne
    M

    Thanks for reply

    My long term goal to have positive cash flow properties which will replace my 9 to 5 job eventually

    Why i choose these pocket just because cheap and good rental return, agree with your view they r cheap for a reason,

    I also studied broken hill nsw but the population is declining every year.

    Not sure about morwell and george town tas

    Bendigo is good heard from lot of ppl, my budget is close to 500k but would like to buy multiple properties if possible

    Your advice will be highley appreciated

    Thanks,
    J
     
    Last edited by a moderator: 18th Feb, 2020 at 1:26 PM
  10. The Grinch

    The Grinch Well-Known Member

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    Location:
    Cairns


    Many people have different views but if buying an IP my advice is chase CG for your first investment as you will hold this the longest. Look for cashflow properties later in your portfolio when youbrequire serviceability to assist with holding.

    Keep in mind cashflow is quickly eaten up by land rates, insurances amd property managers. Plus you need to have funds for any repairs that may come up.

    So your positive cashflow quickly becomes eaten up and you are left with very little cashflow. People have made money in regionals but you really need to do your homework and tread carefully.

    May I also suggest you make your own thread as this is taking away from another persons question.

    This forum has a wealth of knowledge and simple searches using the search feature will help you narrow down.

    Take it slow and don't rush!
     
    Last edited by a moderator: 18th Feb, 2020 at 1:28 PM
    momentum26 likes this.
  11. Toucan

    Toucan Active Member

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    Townsville has a huge demand for rentals still after the flood last year, with people having to rent while their houses are fixed, buying is cheap & lots are saying Townsville will start moving soon. But rates are higher & insurance is exorbitant due to natural disasters. And crime is rampant not that it will affect you if it's an IP
     
    rook2017 likes this.
  12. Tom Rivera

    Tom Rivera Property Manager Business Member

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    South East Queensland
    $260k is very achievable in Logan and Ipswich, but the $350wk is a bit harder to achieve. You'd be looking at $300wk easily, perhaps $325wk. Are you willing to spend any money to add value to a purchase?
     
    wilso8948 likes this.
  13. BMT Tax Depreciation

    BMT Tax Depreciation Chris Business Member

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    Nope. That only applies to plant and equipment, 10-15% of the construction cost. Most capital works (85-90% of the construction cost) performed after 1987 (including previous owners' renovations) are still claimable on second-hand properties.

    I've seen 1970s cottages with prior renovations that were decent but nothing special still pull in over $2000 in annual deductions.

    Apparently? Definitely. That's only a quarter of the way through its lifespan.

    Let's say a house built ten years ago cost $200k (a pretty conservative amount) to build. $180k of that might be capital works. You'd have 75% of that left to claim at 2.5% yearly. 30 x annual $4500 deductions isn't something I'd leave by the side of the road.
     
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  14. Shogun

    Shogun Well-Known Member

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    I use the term apparently when told something and I haven't confirmed it is true or researched further.

    So thanks
     
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  15. Lindsay_W

    Lindsay_W Well-Known Member

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    QLD
    Typical when only dealing with a bank directly - if you see a broker you may find you could borrow even more as they would be able to run borrowing calcs with multiple alternative lenders. That's assuming more borrowing capacity is something you're interested in.
     
  16. Ketsle

    Ketsle Well-Known Member

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    Thanks for clarifying
     
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  17. The Y-man

    The Y-man Moderator Staff Member

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    Sound like you are starting to stretch serviceability - do you have any buffer / contingencies? eg are your loans IO that will revert to PI etc?

    The Y-man
     
  18. Ko Ko Naing

    Ko Ko Naing Well-Known Member Business Member

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    As much as I love regional VIC, Bendigo is the last regional city in Victoria that is large enough and has a lot more room to grow in value. First, Geelong. Second, Ballarat. Third, Bendigo. These are the regional cities in Victoria that have population of 100,000+.

    Moe and Morewell maybe a bit closer to Melbourne in terms of distance. But in terms of population/economy/employment growth prospect, they can't really match Bendigo.
     
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  19. See Change

    See Change Well-Known Member

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    I'd be going brisbane

    I'd be looking in the Logan / Goodna / Ipswich region .

    The market has hotted up in the last two months in-terms of lots more sales , not much on the market , though no significant price increases so far .

    Sounds like a good time to be getting in .

    Cliff
     
  20. croseks

    croseks Well-Known Member

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    Melbourne
    Why do people love to invest in Logan? (Serious question)

    I don't know the QLD market, but looking up all the stats online I just do not understand :oops: