Advice on buying in Marsden Qld

Hi, I'm currently looking at purchasing a property in Marsden to be used for NDIS tenants. I am purchasing through a property business that specialises in this but am feeling nervous about the costs. Land is costing 210k and the build will be 450k for a duplex build returning 8-14% rental yield. Looking at comparative sales in the area, I feel this is expensive but am not familiar with the expected growth etc. I know this is a risk to take but am trying to be as educated as possible. Please help!

 

Nope nope nope. I wouldn’t Marsden is the ghetto and I wouldn’t drop 660k in a dump 50 mins from the city with loads of other cookie cutter house and land packages. You’ll struggle with bad tenants. the ppl selling you that new build will be feeding u all kinds of bs to get you to sign. Aus homes I’m guessing? 660k you can get something Around Rochedale/ karalee/ chermside less cash flow more chance it will go up. If u want cash flow don’t bother with aus resi. My opinion - brissy isn’t land locked like Sydney n melb

 

I've made good capital gains in Marsden over the past 7 years or so.
But my property was about as expensive as your land is. I still see a positive future for the extremely long term for Logan, so I'm happy to hold for the next few decades.

 

Considering you can buy a regular house in Marsden from around 260k you could have two properties and probably three times the land! How many square meters is the block?

660k is A LOT to spend in Marsden on one specialised property. Many better options for growth in Brisbane than this property you are looking at.

You have to ask yourself who will want to buy this property when you want to sell it....?

 

Those 3 words should make you run faster than usain bolt

essentially you are getting 1.75 house on 1 block of land for $660k

 

I have to agree with everyone above so far.
Run the hell far away from this deal.
"Land is costing 210k and the build will be 450k for a duplex build returning 8-14% rental yield"
This part is so scary it isn't a sound advice. You never spend 2x cost build of your land value. Not when you are surrounded by package homes for as far as your eyes can see.
If you don't believe me - pull up your google map and look for yourself.

If this deal was in Brisbane within say 5km to 7km radius.
I would say go for it as worst case your property will still grow 5% yearly generally.

 

660k in Marsden for dual rent!?!? not worth it in my opinion.
As others have said you can get two places with plenty of change left over for that money in the same place or similar in Logan. You'd pay more in rates, but you'll probably get more rent and you'll have a much better chance at CGs.

You could look at a place like Rochedale South (the good areas) and you'll get a decent place for 500k that will absolutely see capital gains and get a better tenant with everything close by.

 

Just as an FYI: To achieve the quoted 14% return, each side of the duplex will have to rent out for $888 per week.

 

100% agree on this.

Marsden...is rubbish!

 

Horses for courses!
I'm quite happy with my Marsden IP.

 

It's NDIS so they could be renting room by room.

The quoted yield is a big variation because there could be some looooong vacancies...

 

Surely whoever is selling it would have done the calculations based on 0% though?

 

Those blanket rules of yes/no to % of build vs land are not good and misleading.

You easily spend that % on building, it depends on land size, area, zoning

Ive spent 60% of my purchase price on a reno!

 

When you are working from a low low numbers 60% is not really that much.

When you are talking about 200% from a 200k point of view. For this particular place or anywhere in the east coast capital city is being over capitalize. Change of zoning don't count or follow this rule.

Hypothetically - If I was to spend 300k renovation on my property on the north side of Brisbane which is 50% of the total value. I would be overcapitalize for the demographic.

 

Looks like you aren't a fan of low social economic area. But you don't mind speaking out loud about it.
I don't really care as long as the number stacks up and for what I want to chase in the short term.
I am in it for the capital gain more than rental yield.

 

When you can buy a house in Marsden from mid 2's and the land value is 200k it would be hard to spend 450k just on a building in Marsden.

 

I have some in lower socio...getting rid of them...if you do a cost analysis you will see that with the amount you spent vs the return/CG would not stack up.

Of course it is your money not mine...you would be better off building a new place..letting it our and farm the depreciation for say 7-8 years and then sell. Even if it grew at say 2-3% a year you would be miles ahead. CG is deceptive because you also need to deduct the cost of renos and maintenance to get the true return. Most people will not understand the maths on this....

 

of course, you are correct, and hence a blank % rule is not a good ,

i acutally am currently doing the figures for a development in marsden, its 2 blocks of land next to each other ,1200sqm, construction costs will be well above 200% of hte land value

 

While the replies may be correct avoid the suburb and avoid the seller (firm providing you) the reasons are not really relevant to you question

I believe all the replies haven't understood the type of property you are purchasing.

Your duplex would be expensive due to the standard of it. I wouldn't call your duplex an addition to the land but more of a consumable. Its a product thats being used by the government with some hefty govt incentives

210k for land isn't expensive (isn't a good deal either - but no you won't be getting any cheaper land either - just that people getting good deals will get a house too for not that much more)

450k for a duplex build in Marsden in normal terms would be overcapitising but if your building an NDIS SDA housing due to extras required to be provided, constructions costs would be higher wherever in Australia you build.

The product your looking at should be thought of as. a business than a rental property. I don't think you will achieve much capital gain (more likely losses) but as long as you could use the property as SDA housing you will be earning income. Your quoting 8-14% so the initially investment could be seen as paid of in 10 yrs while Im sure SDA housing would last well over 10 years

Now back to whether this choice is correct id be more concerned whether Marsden is the right place. Is there a demand for this product in Marsden and top of that in that particular lot. While I don't think lower social economic areas is a no go zone, the property needs to be near amenities. End of the day they are for disabled people who would be disadvantaged mobility to get around place to place and access to healthcare.

Also anyone quoting % return should be avoided (its not an investment - cept the land component and maybe the basic shell of the house)

 

A High Physical Support would rent for approx $1100 a week per side, Fully Accessible around the $900