QLD Brisbane... Again. Suburb vs Property???

Hi Guys

Some of you may recognise my handle from SS, where i asked for some advise a few years back on Brissy, luckily you guys are awesome and really assisted in helping me make some key decisions back then re areas - so here's to hoping you can help again!

I have 2 IP's in Brisbane already, Kedron and Zillmere which are doing well and have plenty of potential for reno's in the future. I am now looking for my third and struggling to decide between south vs north (within 15km of CBD) vs Redcliffe and all the anticipated train line growth (seriously questioning the real effect it will have and when!?!?). Strategy wise I need quick CG, something that will grow in value by 100k in 12 months would be perfect - Budget is up to 600k btw

I am also toying with following the asian investment and looking at the ripple effect from eight mile plains to runcorn/Algester VS infrastructure/new shopping centres on the north side... I have a heap of data free and paid for via pricefinder but am struggling to make a view based on it - so far it has helped me narrow down to about 10 suburbs.

and yes I have been up here all weekend and am more confused than before i started...

That's really MY QUESTION - do you guys buy based on 1 or 2 suburbs or put more emphasis on finding the right property in multiple areas???

Thanks in advance!!!

 

Identify your goals first (for this buy).
Yield or CG?
Add value or hold?
House and land or townhouse?

Then narrow down to the 20 suburbs that meet that goal.

Then look at those 20 suburbs cut out the ones that you cannot afford.

Then look at the rest and research Micro factors. Talk to people, discuss on property chat, check the council map for flood or bus fire risk, check the vacancy rates and other factors.

Narrow down to a cluster of a couple of suburbs.

However once the agents get you on their list they may still call you about bargains in other suburbs. Then you have to work hard to research that too if it's worth it

 

Listening to the podcast from the propertycouch (Bryce from Location, Location, Location, Location, Location, Location Australia) they were restating Pareto's law to be that 80% of return is from the suburb/location, while 20% is from the property itself. They exempted largescale apartments from this "rule".

I chose Redcliffe peninsular first, and am going closer in next.

If you must have $100k within 12 months, then you're really going to have to pick the market. You've got a $600k max you say, so you need 17% growth in 12 months guaranteed. Phew!

Forget about fiddling with ripple effect as that's more for medium term. None of that infrastructure stuff will make any difference in the next 12 months unless it's pretty much already finished and the upswing is well underway.

For Brisbane, choose one of the suburbs that's already seriously on the go. You'll pay a big premium, above market price, but you've got a chance at your 17%. Sunnybank and surrounds may be your best bet.

 

@tazy400 Totally understand your predicament. I just returned from Brissie....and still confused. You're in a better position though, as you already have 2

 

Confused...? Are you saying the catch up with other forum members and all that good info didn't help....?!

 

@tazy400 if you are looking for CG then yes, you can't go wrong by investing within 15 KM of CBD radius.

Outside the Brisbane CBD area, I'd say the suburbs around Ipswich, Ormeau and Upper Coomera it has so much growth potential for the next 5 years ahead.

 

Have you got your first property yet Tekoz?

I'm not sure I'd buy in Ormeau or upper coomera. Loads of land, and for little more money you can be a whole lot closer to either Brisbane or GC, instead of the in-between no-mans lands.

 

Because:

http://www.realestate.com.au/new-homes/new-house+land-in-ormeau,+qld+4208/list-1
http://www.realestate.com.au/new-homes/new-house+land-in-upper+coomera,+qld+4209;+/list-1
http://www.realestate.com.au/new-homes/new-house+land-in-ipswich+-+greater+region,+qld/list-1

Look at them pretty houses

 

Based on my experience here and in the previous old forum, The correct strategy here is not to buy new House as stated by many people in this forum, so I guess those houses that you put there can be used as the benchmark of how the area has performed in the past few months.

I'm sure those builders or developers has done their research well to predict the boom in the region.
(who knows there will be infrastructure project planned in the area by the local govt) ?

 

Developers couldn't care less if an area booms or not. If an area has affordable land, a local council that encourages development and good profit margins they will build there. Marketing etc will attract the buyers (unwitting or not), flog off the stock and off they go to the next project. Once sold they would not care one iota whether or not there's oversupply in the area or good prospective growth in the area because the buyers bear the consequences

 

I agree with what @Befuddled says.

My first ever IP was my first ever mistake - buying a block of land in Melton, Victoria and building a new house on it. Melton Council is pro-development but there is so much land, so how has my capital growth been...? It's worth less now then 5 years ago. Least I learnt a lot though

 

@Kael Did you bought it from John L. Fitzgerald (Custodian Wealth Builders group) ?

Source: http://www.smh.com.au/business/prop...a-chinese-investors-told-20150624-ghx2sh.html

 

Haha can't say I did, Tekoz

He sounds like a typical property spruiker.

 

Fitzgerald has made a lot of people wealthy. Unfortunately these are mostly the commission agents selling his overpriced properties.

 

Hi guys thanks for the advise, had my alerts switched off and only just noticed all your replies now!!!

The 100k in 12 months is really just me being a bit ambitious I guess and the fact that it will take a while to save for another deposit without it. I had some luck buying in Mt Druitt NSW 2 years ago and made 90k in abut 12 months which has helped me be able to afford this next purchase so I know it's doable but perhaps that was a perfect storm scenario and not the norm...

That does logically make more sense however both are tenanted at present and like you I also feel like i want to increase my footprint (well for the next 6 months at least ) and then spend some time getting up to speed on how the hell I manage renovations interstate - looking to raise one of the properties so it's a big undertaking...

Anyhow for anyone looking in brissy feel free to drop me a note and I'll give back what advice I can...

 

Why a 3rd property in Brisbane??? This would be akin to a share investor who has CBA and Westpac shares 'diversifying' by buying NAB shares?? Yes, they are different shares and will move slightly differently but ultimately they are all driven by the same industry - financial services.

Just the same way, by buying a 3rd property in Brisbane, your portfolio will be heavily influenced by Business Services, Tourism, Construction and Mining!! By looking outside of Brisbane and probably outside of QLD, you can diversify your portfolio by exposing yourself to different state governments (public opinion of state governments influences general business and consumer confidence which in turn affects economic conditions and property markets) - there is also stamp duty concessions available to you by diversifying your portfolio.

Most importantly though - you could select a location with an economy which will be driven by different industries. Just like an astute share investor would do.

 

Logan has done 20% in the last 12months, that will get you your 100k. My Penrith place just did just shy of 10% in 3months!
Just as long as Brissy keeps going strong

 

Poor assumptions @Tekoz not every developer make good money and they can get it wrong.

 

I think providing they can sell their product developers don't care, look at whats happened with overbuilding in Chinchilla, Gladstone or Gracemere.