300k IP4 - Adelaide / Moreton Bay / Geelong

Discussion in 'Where to Buy' started by Kelvinator, 8th May, 2017.

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  1. Kelvinator

    Kelvinator Well-Known Member

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    Hey peeps

    It's doing my head in considering all the options i have and just wanted some opinions that are specific to my situation.

    Backstory:
    I am 25. Have 3 IPs all in Logan - average yield around 6.5%, 90% loans, with a bit of equity that i haven't extacted (~30-50k), and a bit of savings (~60k).

    I am now looking for IP4.
    According to my broker, i can get another loan with CBA for around 300-350k.
    I work in the medical field. My current salary including overtime is around 85k, but it is set to grow fairly decently year upon year.

    My goal is to build a decent portfolio size whilst keeping my cashflow roughly neutral.

    I have considered the following areas:

    1. North Brisbane - Kallangur / Kippa-Ring
    Pros - a fair bit of optimism regarding short-medium term growth due to university / train lines.
    Cons - high vacancy rate, slightly negative cash flow

    2. Geelong / Outer West Melbourne
    Pros - perhaps on par with north brissy in terms of potential for growth. Good to invest in a different state / city as my other properties are all in logan
    Cons - negative cash flow

    3. Adelaide
    Pros - Will be able to get better stock closer to CBD areas with 350k. Probably better cash flow than the other 2 options
    Cons - Perhaps large parts of adelaide has less potential for good short-medium term growth?


    What would you guys / girls do if you were in my shoes?
     
  2. D.T.

    D.T. Specialist Property Manager Business Member

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    I think if you have a few in Brisbane already, you need to look further afield for following IPs so as to not have all IPs in one basket.

    I also think you should stay within decent range of capital cities, outer western melb is only growing because its newly laid out areas that people are filling in. It'll plateau once filled out further.

    I disagree with your comment about growth in Adelaide, we're witnessing better sales and revals on the ground.
     
  3. Anthony Brew

    Anthony Brew Well-Known Member

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    Problem I have found is that for 350k, your growth potential seems to be reduced significantly. Property grows based on demand, and since the 350k properties are either far out where there is a lot of land, or an apartment, the demands is far reduced and ends up with much lower growth. The exception is right on the fringes between high and low demand, so for Melbourne this is between 20-30km out west of CBD.
    20km is around 500k and in ok demand and will increase over the medium term.
    30km is cheaper and in less demand and there is a lot more land and will take a long time for population to grow enough for demand to get it on to have good long term growth outlook.

    Same when I looked at Brisbane. 350k gets you a house about 35km out (which for Brisbane is very far - think 60km out of Sydney), or you can get an apartment which, well, good luck with that.

    Would love people to tell me I am wrong and suggest where/what 350k properties have decent growth prospects.
     
  4. Corey Batt

    Corey Batt Well-Known Member

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    I actually like all three options - I've been reasonably bullish on all of the areas over the last 18 months+. Out of the three I'd rather steer away from Brisbane which I think has already shown some resistence levels, whilst Geelong/below median Adelaide still has capacity which is growing.

    In terms of CG in Adelaide - like any area in Australia don't buy into areas with increasing supply above the rate of demand - preferably stick to where there's little if any greenfield supply coming online or townhouse/apartments being developed if you're buying that type of stock.
     
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  5. Gockie

    Gockie Life is good ☺️ Premium Member

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    I reckon option 2 or 3 as you already have 3 properties in the Brisbane economy.
     
  6. wombat777

    wombat777 Well-Known Member

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    For Adelaide take into account increasing defence spending.

    Some big shipbuilding projects, although WA (Henderson) should get a piece that pie.

    There is Future Submarine as well but ramp up for that will follow Offshore Patrol Vessels and Future Frigate.
     
  7. BarneyRubble

    BarneyRubble Well-Known Member

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    Know that people will say those that rent on the Penninsular do not work in the city, however that is not aligned with the TransLink stats. In any case, even though the train is express from Kippa Ring it's over an hour to the city. For Brisbanites that is a long journey.

    Also, if you haven't already, you will soon be hitting a land tax limit.

    My vote along with the others before me would be option 2/3.
     
  8. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    For $300-$350k you would be hard pressed to find a decent quality property in Kallangur - may be further away from the train and shops. It was possible mid last year, but things have moved since then.
     
  9. Guest

    Guest Guest

    If you go with option 2 you'll probably want to sign a contract before the end of this financial year or you'll be competing with a lot more first home buyers.

    Changes to the First Home Owner Grant and stamp duty | State Revenue Office

    Spoke with a friend selling in regional Victoria, agent said they've had a few young people going through in the open inspections, but all are waiting for July 1st.

    I would go with option 3 anyway ;)
     
  10. Hwangers

    Hwangers Well-Known Member

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    hi @Kelvinator - unrelated but curious as to which lenders you went to for your existing facilities? medfin/nab? any LMI you had to pay for 90% lend?
     
  11. sash

    sash Well-Known Member

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    Invest from the following perspective:

    1. Serious Growth 6-12 months - Geelong, West and Northwest Melbourne (30-40 klms out), SE Melbourne 60 klms out

    2. Serious Growth 13-30 months - Brisbane if more than 20 klms

    3. Serioys Growth 24-36 months - Adelaide if more than 15 klms.
     
  12. Kelvinator

    Kelvinator Well-Known Member

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    Used westpac and St george. 90% no LMI. However i had to wait until i was fully registered to the medical board before i can now use CBA.
     
  13. Kelvinator

    Kelvinator Well-Known Member

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    Interesting viewpoint... What makes you think geelong / outwest melbourne is going to boom so soon?
     
  14. Corey Batt

    Corey Batt Well-Known Member

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    Sash can explain for himself but I do concur - mainly because:
    • it already is booming
    • there's been a consistent drive of buyers looking West as they're priced out of everything else.
     
  15. Kelvinator

    Kelvinator Well-Known Member

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    In terms of "Below Median Adelaide" - are you suggesting that more premium suburbs have already done it's growth?
     
  16. melbournian

    melbournian Well-Known Member

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    very true on geelong - went to a few H&L and there are so many ppl lining up - this will be the next FHB destination to proximity to Melbourne (really the vline train is the same as the frankston line) in terms of time. if you want serious growth as @sash says stick to geelong and avoid Brisbane. The FOMO factor is well and alive in the FHB market.
     
  17. sash

    sash Well-Known Member

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    That is correct...the boom has moved to Geelong and West/NW Melbourne
     
  18. sash

    sash Well-Known Member

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    Yes...Geelong will go well before Brisbane....it is already read hot....no supply of land at the moment ....
     
  19. sash

    sash Well-Known Member

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    Its all ready hot.....it will get hotter...
     
  20. melbournian

    melbournian Well-Known Member

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    @Kelvinator melbourne is no logan that is for sure. high auction rates, high immigration, you can visit the H&L sites and see the plots being sold so quickly, as places like pt cook and tarneit and werribee get more exp, families move out to more affordable suburbs which is not that many now - and geelong being one of them with beachside areas which realy is the same time on the train to CBD for people who wokr there. it is an alternative option for those with X budgets.

    after today's budget with salary sacrifice to FHO etc and the other concessions kicking in in july you will be expecting a lot of FOMO in melbourne. (i go to auctions and H&L sites across melbourne regularly to scope and see the action). can tell you there is no shortage of bidders. Melb in comparision is much cheaper to sydney as well.