Brisbane home budget of 700k- 750k

Hi All,

I am looking to buy a house within 10 km of Brisbane City with a budget of 700 - 750k. I would stay in the house for next 4 years before renting it out. I definitely want capital growth as I plan to hold the property for next 10 years. I might be ambitious here an would expect an rental of around 600 per week after all the expenses. I am looking for recommendations on which suburb I should consider and should I opt for dual income property for rental benifits? Consider me a newbie. Cheers

 

Thanks for the reply..I forgot to mention no Queenslander or major renovation project. I would prefer a brick house with less maintenance and decent condition. I was think north of brisbane. I am aware south is expensive and out of my budget. I m aware 600 weekly is very difficult. I might be luckly if I find a duplex in Everton Park or Stafford heights.

 

Maybe you should consider the following. Buy a house that has space underneath, live in it for your 4 years and maybe consider renting out the area underneath via airbnb or straight rental. Your medium term could then achieve 600 pw after you have left

 

Unless a property has a council approval for a dual occupancy, this it is illegal to convert a house into two living spaces in the Brisbane City council region and rent it out as 2 separate tenancies. You need to check the approved use of any property before you go down this pathway in Brisbane. Even renting a secondary dwelling (ie: Granny flat) to a separate tenant under a separate tenancy agreement is illegal in Brisbane city council region. Call council or talk to a town planner ... or get expert help if you are unsure!

 

a few weeks ago we rented the downstairs of a place in a good south bris suburb. Was great! Was done with the normal paperwork ........ is there maybe a disparity between what the buyers agent says and what really happens?
The term illegal seems a bit over the top? Is it a criminal offence? Or do you mean hte council doesn't approve.

 

I mean that because it is not an "approved" use according to council then it does not fall under what council considers accepted development. Here is some information from the BCC website which discussed both granny flats and dual occupancy requirements when renting to separate tenancies in the Brisbane City Council region:

Granny flats

So ... I guess from the perspective of a landlord ... in the event of a fire (for example) ... then yes is "could" be considered a criminal offence if the property was being used in an illegal way and there was injury/death of an individual. I'm not a lawyer ... but I would not want to carry this risk as a landlord. This is why understanding the laws around tenancies and approved use of a dwelling is so important.

 

There are lots of people renting downstairs places for highset house in BCC.
But doesn't mean it is legal at all - insurance won't cover it like landlord insurance, tenant insurance.

Lots of people say - she'll be right mate. Until it isn't or the tenant knows how to bend the rules and you have on your hands squatters.

 

It is a huge risk that people are prepared to take. I know it happens also ... as you say "she'll be right mate" .... until it isn't!

 

I think the alarmist nature of this discussion is quite out of kilter with the real world. Does anyone know of a squatter who suddenly has rights on someone's downstairs? What a crock!! Also does anyone know of ppl who are renting their downstairs, short term or long term? Yes heaps!! So out of the heaps of ppl doing it there are no squatters!!

Insurance is NOT the law. If it was ..... floods would be illegal because insurance companies don't want to cover buildings for floods. Floods are not illegal (at least mother nature doesn't think so) so don't conflate the two things. Insurance is related to risk. So one way to mitigate the risk of an unpleasant person down below is ...... drum roll ............. live in the top!! No insurance needed. Keep an eye on the person! It is easy to kick someone out when you are in the house. No 'expert' needed for advice.

I think we are all aware of the BCC move to restrict granny flats, that is largely an issue of development not current use. Donga out the back doesn't suit BCC.

But under the house? Brisbane ppl have been raising the older style houses for donkeys years. Of course there are ppl living under!! If they are not living under there ........ why raise the blinkin' house?

Ppl rent out rooms, garages, under the house, top level of the house etc. It is all done, there are no police knocking at the door, handcuffing the residents. What is this notion of 'illegal'?

So getting back to the suggestion ..... why not buy a house, live in, rent underneath. When you move rent the house allowing a sub let. (Or Not). tailor your insurance to your risk.

But if you believe hte 'experts' you better take out squatter insurance for the grubby beast under the house, under the bed, inside your cupboard. Or inside your mind. Watch out if the kids have an 'imaginary friend' - it is really a squatter. You need an 'expert' and some insurance to solve it all.

 

I think there is some confusion here ...

Scenario 1 = if the property was purely a rental property
Scenario 2 = if the property was a home and the owner rented out one part of the property.
These are two different scenarios that I think have been confused in the above discussions.

You will find the reason insurance was introduced to this topic was on the basis that an insurer may not provide full cover (especially for legal liability) in the event that a property is being used in a way that it is not approved for.

Let me give you an example ... a raised property does not meet the minimum habitable floor level underneath so it is not "approved" as a habitable space. The approved building plans show the underneath area of a property as "storage" not as "bedrooms" or "living rooms".

If the area is advertised by the landlord as a bedroom and living area, then a tenant moves in and uses the area as a bedroom and living area, this is where problems might arise. In the event of a fire ... if there is loss of life and the property owner knew (or ought to have known) that the are was not approved for use as a bedroom ... then there may be major issues (from a legal liability perspective) - perhaps not from a building damage perspective.

A landlord and an owner occupier both need to be aware of the potential for legal liability - this is critical. A good property manager should be highlighting this risk for property investors, but ultimately it will come back to the property owner and understanding what the property is approved for (development approvals and building approvals are available through searches) and alerting prospective tenants of the same. Ultimately the tenant will use the area as they want to ... as long as the owner has not misled a prospective tenant.

Property investors can not own a single property in BCC (eg- a house) and rent out two separate spaces (eg- upstairs / downstairs or main house / granny flat) under two separate general tenancy agreements, unless the property is approved for use as a dual occ (or some other type of approved multiple dwelling use).

Home owners, can rent out rooms or air bnb their spaces (subject to those areas being habitable spaces as per above comments). These arrangements do not require a general tenancy agreement to be in place - they are usually governed by rooming accommodation agreements or something else. These are different to general tenancy agreements.

BCC is happy to approve secondary dwellings - there is no issue with lodging a development application for this type of development. In fact we know people who have an approved secondary dwelling on the same lot in BCC. However the rules in place are around its potential use and restrictions on having more than a single tenancy agreement for a property.

So it all comes down to property owners understanding the approved use of a space. Some people will (and do) take risks to maximise their investment returns. We always see properties being lived in that are not approved for a particular use - especially underneath houses where the area is not approved as a habitable space. Yes we've also seen garages being used as bedrooms. It is always our job as professionals to highlight the associated risk ... then it is up to an individual property owner to decide how an area can be used (and of course the tenant also decided how to use a space - as long as they have not been misled).

Hope this clarifies the confusion???

 

Let's face it, renting under is an option. Lease / sub lease is an option. Renting rooms is an option (paperwork or not - it is an option). Airbnb also. All great options.

In terms of fire risk, it makes sense to:

1. install fire alarms;
2. provide fire blanket (kitchen?) or well maintained fire extinguisher;
3. fire plan (exits);
4. elec safety switch;
5. avoid bushfire prone areas for this plan ;

Perhaps the best idea would be to ask the tenant down below not to smoke inside, don't cook chips on the stove.

The scenario that a fire arises from a low ceiling is a real stretch.

And that the real culprit (not the flames, the smokes, the chips, or the failure of the tenant to extricate themselves out of the fire) is the ceiling height? and the 'should have known' law that nobody seems to know whether exists or not?

Which planet is this?

 

But if we are talking about what laws do apply ............. real not imagined laws:

Renting out part or all of your home

 

Hi Brad, How did you go with this?

haha I think your right - aiming for $600 after all expenses is a very ambition goal. Considering properties at that price range struggle to yield over 4.5%. To get $600 you would be needing to target closer to 9% or have a very low LVR to help with the cashflow.

Curious - how did you come about to defining your buying criteria?

 

tell us more
sorry what i meant was tell us more about getting sued.

 

Actually the link you supplied provides details about tax implications when owning a rental property.

The laws around renting out a property are state based not federally based. they can be accessed here:

Legislation | Residential Tenancies Authority