Brisbane investment strategy? I'm Little lost

Hi PC'ers

Im a little lost on my investment strategy, I'm from sydney but currently on ground in brisbane doing the rounds looking for a solid IP, Ive got about 300k cash to spend so looking at max spend of about 7-800k

Original strategy - Find something LMR1 or 2 on 800m2 plus, rent out, and build townhouses 2-5 years down the track. Something sub 10kms to the city.

Problem - Finding the money is not going as far as i thought, finding it hard pinpoint a suburb/area to attack. Liked wynnum as the price point was a little lower than the carina/cannon hill/camp hill/greenslopes/mt gravatt ring.

Now I'm thinking do i snap up a couple of townhouses closer into the CBD? or maybe a couple of 500k homes on small blocks a little further out? Then i saw some townhouses in loganlea for 260K returning 340/week..

i guess i am just thinking out loud..
anyone got any suggestions?

I am definitely after CG, But a buy and hole strategy just bores me, hence my original LMR zoning theory.

Thanks guys.

 

Hi Ryan,

What are your goals? 5 year? 3 year? 12 months? this month? Retire early? develop property fulltime? Have $100k passive income by age X? This, along with your financial position will dictate your strategy and what you buy today.

Needless to say I am a little biased, but for people just starting out, many adopt a cashflow positive strategy to build up a large value portfolio quickly and position themselves so they have enough equity to move on to bigger projects like development. Its also a less riskier strategy as you're not just holding properties that cost you money to service and pray for capital gains to happen to make that development feasible etc. We are all fairly certain CG happens eventually, but how long can you afford to wait?

With townhouses in Loganlea, make sure you factor in the body corporate as these can be ridiculously high (up to $3500 PA)

 

Yes there was no mention of the Strata fees, but they yield was sooo tempting for the out lay (circa 20k) would pay P and I

 

Brisbane is no little fishing village anymore...its a proper country town it its own right... all you Mexicans coming here and thinking you can take Brisbane for all its worth and then some .. don't mess with the B..

To answer your question, I too am confused with what you are after- from devt of townhouses in camp hill/carina etc to bayside to established houses outer to cheapies in logan....this is a lot of variance in areas as well as strategy ( rent, buy n hold, vs devt)
...nevertheless, 700-800k is mucho dineiro and Brisbane will welcome that

 

Just something you may want to consider infrastructure and buildings costs in Brisbane are the highest in Australia....ouch

 

You need to make up your mind first! If you're unsure, step back and have some patience. It's never hurt to wait, cash is king, and you don't want to be doubting your decision once it's made. Measure twice, cut once.

 

Thanks guys,

Your right joel

I'v been on the ground driving from wynnum to rocklea and everything in-between and just have so much data in my head. Time for a beer, and some reflection and a re group.

haha thanks amigo,

Honestly my strategy is to buy something with Development potential, Give to a year or two to gain a little CG whilst DA'ing etc. Then construct 3-4 and try to retain 1. Then repeat.

Saw a couple of nice prospects in moorooka this morning, although none lasted long on the market.


After running around half of SE QLD over the past few days, all these ideas just pop into your head. Time to reflect.


On another note, too those with IP's in brisbane, stock seems to be moving quickly.

 

Would agree with others, you need to work out what you actually want and what areas meet the criteria you set. Tingalpa has grown a lot, it is sort of in the middle, you may still be able to find something in Murrarie, but it has caught on about a year ago, so may be growing too fast.

Logan is a different game if you ask me, but a lot from here have/were buying Logan area.

 

take some time out to obtain a more clear vision...without which you might repeat running around half of SEQ.
I would not let quickly moving stock cloud your goals and clarity.

 

Most development potential blocks are owned by people who know what they are sitting on, and now expect a premium price. Developers have been hounding us for years. There are loads of DA blocks now available, maybe start lowballing some of these. You won't get 800m2 sub 10km for your money. Mt Gravatt East blocks are commanding 700+ on 607 without DA. A higher price and the numbers dont work either.

 

With lots of oversupply scare, would you still develop? Units are killing the rentals and sales not great either..:

 

Yeah, I've found this since being on ground, although i did some some potential in moorooka which i will further investigate and also keep an eye on wynnum, although further out, it seems like a nice place with decent transport options. I don't plan to turn dirt immediately, would look to lease out for 2-4 years, hopefully gain some CG whist planning is being approved.

I would not be looking at units, I'm looking for a townhouse development. Nothing to massive, 3-4 on a 607m2 would love an 809m2 but budget constraints




Its all good trying on the keyboard, Gotta put my mouth to action!

 

My wife and I had pretty similar ideas (with the townhouses) and went up recently to narrow our focus in more detail. I posted a summary of my thoughts on the Brisbane hype thread a few weeks ago.

My tip on this is to go to a bunch of new townhouses in the mentioned areas and get a feel for the demand for that type of stock. I'd go premium and target owner occupiers, make it very very nice and it will likely sell better than standard stock. But again, that will depend on what you want from the project.

Land prices have increased in those areas for those older homes that can be converted to townhouses a fair bit (15-20%+) over recent years, some on here would have made decent gains relative to the general Brisbane figures (minimal).

Townhouses may have an oversupply problem in pockets too - be wary of that. Some sub-pockets seem to have its own little dynamic too.

If your $$$ allow you, may also want to explore doing the same thing in more premium areas than what you mentioned. If developing to sell, you've got to ask who are you targeting. I'm not sure about this, but of my limited research, premium upmarket townhouses seem to cater to Brisbane demand a little more than stock standard townhouses about 10kms out.

Also note the development costs are a bit higher. Doesn't mean its not a worthwhile exercise, just may mean you need a bit more cash to front the deal.

 

Great feedback Redom
I may stretch my budget a little and bring in an investor for the build. its an option to definitely consider, a blue chip property is always one you want in your portfolio.

Thanks