Join Australia's most dynamic and respected property investment community

$400K for IP which of the following options would you choose?

Discussion in 'Where to Buy' started by tango76, 29th Mar, 2016.

  1. tango76

    tango76 Member

    Joined:
    26th Mar, 2016
    Posts:
    8
    Location:
    Sydney
    Hi all,
    I'm a newbie to the forum and I would like lots of help please. I'm preparing to purchase my 3rd IP's. If you have $400K to invest (buy&hold, positive or neutral cash flow is desirable but slightly negative CF is ok, and decent capital growth) which of the following options would you choose?

    1. Ipswich region: Houses in Goodna/Gailes/Camira/Bellbird park

    2. Brisbane north: Houses in Bracken Ridge, Redcliff

    3. Melbourne: 2br villas/units in Coburg, Brunswick, Footscray or West Footscray

    4. Frankston

    5. Hobart: Houses in Moonah, Lindisfarne, New Town.

    I know that I am casting my net very wide at the moment. Hoping for advice to narrow down my search.

    Many thanks!
     
  2. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    4,913
    Location:
    Sydney
    Hi Tango76.
    First question. How do you think these locations will perform over the next 1 and 5 years? Are there any locations you think will outperform? Also are you comfortable with the rental yield achievable in each of these areas?

    Second question. Where are your other properties?
    Reason for asking is that its not good to keep everything all in the 1 state, for diversification and land tax purposes.

    Ta,
    Gockie
     
    tango76 likes this.
  3. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,735
    Location:
    Sydney
    Assuming you've done all your DD and risk assessment, then I would look into eigher option 1 or 2.
     
    tango76 likes this.
  4. C-mac

    C-mac Well-Known Member

    Joined:
    26th Jun, 2015
    Posts:
    794
    Location:
    Sydney
    As Leo said, SEQ region would be worth a look, though northern Brisbane has moved in some pockets already. Not sure about movement in Ipswich (I dont follow that market currently). @See Change wrote up a piece on Goodna recently that is worth a read if considering it.

    Depends on your future growth objectives for this purchase, though. If this is a capital growth buy, then I'd have a different lens on criteria compared to pure cash-flow. Your 'brief' in your post suggests CG is where you are looking for this purchase. If it is property #3 I'd be looking for CG too, to get you into #4 and #5, faster.

    I'm a firm believer in Hobart and Frankston but think both have had a good CG flutter recently. Not sure how much more there is left (for thesd current cycles in these areas).

    Just my two cents. Overall I think you've given yourself some excellent choices. I might also recommend you consider parts of Adelaide at this budget and potentially Canberra too (if the election has already happened before you buy)
     
    House and tango76 like this.
  5. York

    York Finance Broker Business Member

    Joined:
    24th Jun, 2015
    Posts:
    1,621
    Location:
    Sydney
    Agree with @Leo2413. I'll narrow it down further and say option 1 personally. Those outer Ipswich suburbs are primed for growth in my opinion. With your budget you could try stretch it a bit more and get 2 if you don't mind the older stock. Of course like always do your own DD and stay away from the overlays.
     
    Tekoz and tango76 like this.
  6. tango76

    tango76 Member

    Joined:
    26th Mar, 2016
    Posts:
    8
    Location:
    Sydney
    From what I have read and researched, I think these locations will have some decent growth in the next 3-5 yrs but I'm not sure which region will be best. Among these, Ipswich region, Frankston and Hobart will give the best yield. I have a soft spot for Hobart and really like the look of Lindisfarne but I have to be careful to invest with my head not my heart :)
    Both of my IPs are in the Gold Coast: a 4br house in Broadbeach waters and a brand new 4br duplex in Bigerra Waters.

    Many thanks Gockie!
     
    Sam Yue likes this.
  7. Sam Yue

    Sam Yue Well-Known Member

    Joined:
    14th Jul, 2015
    Posts:
    100
    Location:
    Sydney
    Don't under-estimate the coast towns such as gold coast and sunshine coast. These places currently have the best performing economies with large infrastructure projects on the way and increasing rental.
     
    tango76 likes this.
  8. tango76

    tango76 Member

    Joined:
    26th Mar, 2016
    Posts:
    8
    Location:
    Sydney
    Thanks very much C-mac. Great advice. I was thinking more toward a cash flow neutral property with some CG but as you have suggested I should think ahead and beyond... how to get to the next IPs faster :).
     
  9. tango76

    tango76 Member

    Joined:
    26th Mar, 2016
    Posts:
    8
    Location:
    Sydney
    I'll definitely look into this. Would you be able to suggest any particular areas in Adelaide or Canberra?
    Much appreciated.
     
  10. tango76

    tango76 Member

    Joined:
    26th Mar, 2016
    Posts:
    8
    Location:
    Sydney
    Thank you very much for your thought!
    I am quite hopeful about those outer Ipswich suburbs, particularly Camira, but a little concern regarding future land release affecting capital growth.
     
  11. C-mac

    C-mac Well-Known Member

    Joined:
    26th Jun, 2015
    Posts:
    794
    Location:
    Sydney
    @tango76 when it comes to Adelaide and Canberra I am actually pretty useless!

    Only just started my research phase on Adelaide in the last couple of months. @D.T. might have some ideas for you, for that $400k-ish investment budget in Adelaide. My two cents would be to go for as big a land-size as budget allows, if a long-term b&h strategy is what you are looking at.

    Canberra I am utterly useless. Only mentioned it as I know in the unit market in some suburbs there could be opportunity based on the election result (depending on which party gets in, could dictate how many Canberra-based jobs there will be and thus demand for property there).
     
  12. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    4,913
    Location:
    Sydney
    For Adelaide either go close to the city or go down South. It's nice down there and still affordable!
     
  13. mcarthur

    mcarthur Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    524
    Location:
    ACT
    There's not much at all for $400k in Canberra, and certainly not in housing. One of the brand new, outermost suburbs just had a land release. Average blocks - land only - were hitting $600k!
    In ACT, allhomes is the site with the data and sales - I'm not expert on the unit market so have a little look there to see what's around at your price point.
    Also, have a look at Queanbeyan for more affordable housing. It's right next to Canberra and there are many who commute. It does have a different growth pattern to Canberra, but they are linked.
     
  14. strongy1986

    strongy1986 Well-Known Member

    Joined:
    24th Jun, 2015
    Posts:
    201
    Location:
    VIC
    If you were to spend 400k on one property on option 1 i would say no way

    All the other options looked good -

    Although wouldnt spend 400 in moonah

    new town yes
    I like lindisfarne but personally would wait for a cheap rennovator to come up with good river views

    The thing you have to remember when looking at hobart is that its really not that big you may as well also consider cairns,townsville, geelong sunny coast, gold coast

    Hobarts advantage is that they havnt built any new houses in 30 years
     
  15. datto

    datto Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    1,390
    Location:
    Mt Druuiitt
    400K could probably get you a 3 bedda in Mt Druitt.
     
  16. Heinz57

    Heinz57 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    493
    Location:
    Brisbane
    Cash flow neutral in parts of Ipswich for around $300k, then add a granny flat is one option
     
    Tekoz likes this.
  17. ej89

    ej89 Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    688
    Location:
    Sydney.
    None of the above. A house in Sunshine area :)
     
  18. ej89

    ej89 Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    688
    Location:
    Sydney.
    This is a "who has the best crystal ball" question right?
     
  19. fols

    fols Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    151
    Location:
    Sydney
    A house in Sunshine for $400k?
     
  20. ej89

    ej89 Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    688
    Location:
    Sydney.
    Sunshine area...surrounding areas