$500k in Brisbane vs Melbourne

I'm looking for an IP and have budget $500k. Thinking in Melbourne and Brisbane, would love the thoughts of locals for ideas on suburbs.

Criteria:
- good gross yield, need it to be cash-flow positive or close to. So maybe 5%
- walkable approx 1km to a train/tram station

Not essential, but nice:
- capital growth isn't key but don't want one that is going nowhere either
- would love townhouse/house but I'm okay with apartment if location is good, low-medium density area
- at least 2 bdr
- <= 40-45 min travel to CBD

The idea is long term buy and hold. Just need a few suburbs to focus reading up on, so many mentioned in this forum !

 

That's probably the hard part.

Otherwise in Vic, Broadmeadows, Jacana, Deer Park, Hoppers Crossing, Werribee (train <35 mins) would fit the bill.

 

I think the long run stats show Brisbane as undervalued in comparison to Melbourne. You could get a place not too far from the city.
Melbourne does have more diverse demand at this minute though it seems, but it has had a bull run already. Brisbane is not booming and still has a few struggles economically but the prospects are very good. Brisbane seems 'next in line' plus the large infrastructure happening.

 

Brisbane can satisfy your criteria. I'd suggest there are plenty that meet your criteria 5-10 km from Brisbane cbd.
Not sure about Melbourne - others more familiar with outer Mel can advise.

 

Thanks for all the comments, I'll look into those Melbourn suburbs suggested. Brisbane seems a bit more risky, think I'll go have a look at historical yield in areas close to CBD to give myself a bit more comfort.
Any particular areas/suburbs close to Brisbane CBD where young families/professionals are tending to live at ?

 

Comparing to what you can get for 500k in brisbane and in the better inner suburbs at that ( prob ex house, but you are not after that anyway) vs what and where 500k can get you in mel ( e.g. suburbs mentioned above such as Deer park, weribbee etc)...Brisbane is FAR less risky than Melbourne.
I would say Melbourne is less risky for areas such as inner-mid south east where it will cost you substantially more than your budget e.g. around the mil dollar mark and that too only if you get a consistently high demand area such as inner-mid southeast mel.

 

With that budget and seeking 5% rent return, Brisbane every day of the week IMO.

 

I site my example had some cash to buy a couple of houses end of 2015/16 - decided should I go to Brisbane buy 5-6 houses or stick in Melbourne maybe 2-3 houses.

After putting the numbers up in 2017. CG is nearly 7 figures for those houses in melb while the target suburb in brisbane I would have gone for would have only delivered 1/10 of that. Again a bit of luck, hard research, on the ground inspections and studying the markets , watching infra plans, zoning changes.

I believe Melbourne has the capability to have the next boom suburbs it is a matter of picking the ones that will go (2014/15 - I remember was the ringwoods, claytons, 2016- preston, reservoirs, sunhines, maidstone - 2017 - st albans, heidleberg west. For ppl who only keep saying million dollar suburbs in Melbourne inner mid south east are safer probably have not gone to the inspections In the west of seen the land estate offices in the west or outer east. Even pt cook, tarneit, WL, hoppers all moved like nearly 100K the average when the ripple effect happens. Unlike ppl who saying Sydney investors are buying up in Brisbane, it is diff here, a lot of the west are FHB and families. Say Heidelberg West move like 300-400K when I was looking to buy. if anyone got 3 of these and you nearly 1 mil up in 2 years.

For 500K I would go to geelong and pick 2 or 1 or werribee (you would have to do research, make calculated estimates on the suburb, streets etc.

 

what suburbs are recommended in Brisbane for 500K?

 

^ How much do you have cash saved? If I was you and you are eager to grow your portfolio in a growth area I would buy multiple properties not just 1.

For instance if you had $200k saved up I would try to aim for 4 x houses in the Logan/Ipswich area. You will easily get 5.5% yield and if you buy right over 6%.

You can find some real bargains there. Areas offer $350k newish homes with fully renovated interiors, less than 10 year old homes, 30km from CBD (30-45min drive) and 30-45 drive from Gold Coast. You will benefit from huge depreciation and tax offsets at the same time a positive geared property. (i.e) One of my houses I bought for $345k first year depreciation is over $7000. Its like that for the first 5-6 years. Bloody awesome.

You would be buying into a high development area currently with huge money being put into them regarding infra and the potential for capital gains is huge in the mid term (i.e) 5 years time.

That would be my strategy. If you decide to buy a single home for $500k you'd be lucky to get 5% yield I'd say. Your capital growth potential would depend on the suburb but if a 1 house investment I'd say buy as close to the CBD as you can for that price.

 

around 125K offset cash and 150K-180K equity in PPOR
weighing up options between MEL/BNE and 2770!

 

hahaha.....you've been reading my posts I see. Look I'm just sharing my personal experience and what I have done. I've accumulated alot of properties > 17 spread across Sydney and now in Brisbane (Logan/Ipswich and Brisbane councils). My strategy has worked for me thus far and I dont buy houses without hours upon hours upon hours of research. I pretty much spend entire weekends on property after working 50hr weeks + running my car spare parts business online.

You need to spend time researching and what is comfortable for you. I'll be honest no point believing alot of people online myself included as the only person that has their best interest at heart is yourself. Take the information you get on here but always do you due diligence and DYOR.

Whats your aim to be a property tycoon or you want to have 1 or 2 places and be done with it?

 

Why would you want a property that is nearly positively geared with prospects for slight capital growth? Sounds like a dud deal. Some people invest for cash flow, I understand this but don't practice this. Most invest for capital growth whilst trying to avoid huge holding costs. It sounds like you haven't got your strategy and goals aligned, which might leave you wanting down the track....

 

Can you please name some suburbs where it's easy to get good rental return and capital growth as well? I'm finding it v hard to understand any decent properties on the Northside which have returns around 5%. Asking prices have gone up substantially as compared to the rent achieved.

 

That is best advice one could get (better to go look for yourself suburbs, do you own due diligence) as see if it fits, it is not one size fits all, different ppl would have different financial commitments, some might want cashflow some might one capital growth - it is all subjective to one's needs.

 

my goal is to keep purchasing beyond this IP and right now serviceability is the hurdle, not equity. I need another stream of income that banks include in their calcs and getting a positive cashflow property seems the way to go from here

 

Good on you man. Your thinking like a true investor. Goodluck to you.

 

No crystal ball, I'm afraid, so can't make claims about future growth but 5% is easily found in and around:

• Bracken Ridge
• Bray Park
• Strathpine

 

5% can also be found in Deception Bay.
I was just up there on the weekend and found it a lot better then I had expected.
Retirees walking around, strolling on the Beach and enjoying a Breakfast in the Zesty Lemon Cafe.
It has it's own shopping centre & WestField Northlakes is nearby.

If you look hard enough, you should be able to pick up a house with waterviews on 600+ sqm for <$350K

 

How do you define "undervalued" ?
If it has lower demand, then that would not make it undervalued - depending on ones definition of course.