QLD Brisbane Metro or Gold Coast?

I would also prefer to buy and hold so if I buy on the GC and it booms but I can't meet serviceability again before the bust I'm going to be stuck in holding for years.

 

True. I've had that too. Equity but no serviceability = :'(
Need a balance.

 

Be very careful with this. Inala is part of BCC which means that you cannot legally rent out a granny separately to the main dwelling. If you did rent it out separately you may have trouble sleeping at night knowing that any damage won't be covered by insurance not to mention other litigation vulnerability. If you want to do granny flats, go to Logan.

 

My work/family situation won't change so I will have to rely on savings and small serviceabilty increases to keep going (hence the granny flat idea). Very frustrating from a finance perspective

 

Thanks for the info, I'll check this with every place I look at now. Is that a common rule across the council areas? I just booked marked the wiki page for the council areas

 

BCC covers most of Brisbane unfortunately....

 

Brisbane is completely different to Sydney in the council structure. Basically, the whole of Brisbane has one council and the rules about granny flats is a blanket. You then move 20kms or so to Logan or Ipswich council and they operate under different guidelines.

 

How annoying.... I know in Sydney that rule applies to non-permanent structures i.e. caravans, but had no idea about Brisbane.

Any idea which councils, apart from Logan, don't have that rule?

Another day, another obstacle to overcome!

 

Starting to think I need to put up a thread for strategy suggestions, I'm hitting a lot of dead ends and running out of ideas. Finance alone has taken me 10 months and I still don't have the okay on pre-approval. Liberty is the last hope

 

Ok if you want to buy, obviously you need finance. (And serviceability). I saw you wrote this on another thread and have a question:

Are you paying P+I on an IP? I'm a tad confused. $1,400 per week is $72,800 per annum.

 

Yes. Here's our financial situation:
We are refinancing that property, we owe $560k and are waiting for a loan to settle (interest only for 5 years) on that property at $680k which gives us our $120k deposit for the next purchase. The new loan should settle early January.

We have been knocked back by CBA, Aussie and Qantas CU for another loan. We are using a broker to get a loan with Liberty, broker says she can get us enough to purchase a property up to $600k. All documents have been submitted and assessor was looking at it on Christmas Eve.

Our personal situation is this:
I work in a highly specialised role in the public service, I cannot change jobs without taking a significant income hit and I cannot boost my income above my wage apart from necessary overtime (which is very sporatic). This year my income will be just over $100k.

We have a 2, 4, 6 and 8 year old which has been the biggest impact on our serviceability. My wife has a part time beauty therapy business which has only been operating 6 months (therefore she is counted as another unemployed dependant). We rent where we live and we own that one IP. That IP will most likely become our PPOR late 2016/early 2017 because we want to raise our children in a better area and move while they are still young. We still have to ability to rent part of this IP as there is a one bedroom unit in the basement which we get $360 p.w. for in rent.

EDIT: I should add that we are paying $1400 p.w. so we know how much we are saving, with the next IP I will park our weekly savings in an offset account.

 

I see. Can I suggest if you successfully borrow the 480k to allow a 600k purchase, that you don't buy a pricey IP with it? You don't know what your wife's income will do down the track, her being parttime self employed and you both have small kids who you will need to support for a long time. I also think your loan for what will be your ppor is already substantial for what i'll call a single income family and if interest rates rise (unlikely just yet but it might be a year down the track) and you are the only breadwinner and you lose your job.... what if it takes you 3 months to find another well paying job? It won't look pretty. You might need to take it a bit slower being the breadwinner for all 6 of you incl. some littlies.
I also hope that if you became unemployed you have funds to live on. Income protection too. If it was just you and your wife no kids I'd suggest borrowing up to your eyeballs is ok, but with the children I think you should be more cautious, and if you decide to invest you are deadset right, it must be cashflow positive or neutral... the institutions that have knocked you back have good reason. I'm sure you didn't want me to say that this being a property investment forum and all but.... Sorry.

Logan might be the way.... good yields, lower entry prices but do your due diligence. Note if it tanks, it will definitely tank. And there's uncertainty still in the Brisbane market. We think it will go up in 2016 but there's no crystal ball.
Take away story... please make sure you think through any purchase thoroughly.

 

Thanks for your advice @Gockie, I appreciate any input. My job is extremely safe, short of a Greece style econonic meltdown it will always be there. That is part of the reason I can take on more risk than someone employed in the private sector and even others employed in the public sector.

We don't rely on my wife's income at all, to this point we have funded her business entirely from my income and she hasn't reached break even point yet.

We were married at 23 and 21 and started having kids straight away, we have always been tied up in property (both bought our first properties at 19) and always had to rely on the rent to get the loans across the line. We have always been able to keep our places tennanted because I do all the renovations and if need be we get tenants in at below market rent quickly. We have a good understanding of managing IPs, we have owned 4 between us, owner managed and had and array of good and bad tenants.

Although our valuation doesn't show it, we have equity of around 45% in our property, I'm confident if we had to sell we would be looking at $1 mil+ so even in a fire sale we would come out okay. The property is also located in very desirable spot opposite the beach.

The biggest risk is buying in Brisbane because I don't know the market, up to the last IP I only ever bought locally in Western Sydney.

Our main motivation is to give our kids a house each, we want to give them the best start we can and if we wait another 7 or 8 years to pay down debt it will be too late to help all 4.

We are going in with our eyes wide open, we have fairly substantial contingency savings and know what we can afford but as you can see we can't afford any serious missteps and basically have to buy as safely as possible while maximising the return.

 

Cool Tim & Chrissy. Sounds like you'll be fine. You have equity behind you and you are well aware of the risks. Let me say you both did very well to start investing so young. And yes... much better for you to be buying interstate than adding another Western Sydney property. Very best of luck!

 

Thanks @Gockie!

I'm always keen to get as much input as possible. The post from @Inov8ive has potentially saved me making a massive mistake.

Are you heading to the Western Sydney meet up in Jan at Wenty leagues? I notice you work down the road from me

 

Yep! My first Wenty meetup ever because I can't usually do Wednesday nights. Looking forward to it! And there's a few of us in Parramatta it seems.

 

I've been following the northern GC market while away. Houses in the approximate 500k - 700k range are taking much longer to sell since August 2015, if selling at all. The market did well through the New Year period in 2014 and 2015 for that price range, but it's dropped right away for this New Year. It's certainly the most notable change in the last two years that I've seen.

Would the Chinese economic worries be having an influence here?

 

Yes in that Chinese are desperate to get themselves and their money out of China. Australia is a major destination for them.

 

The GC is not the same as my local area and obviously will have a different property cycle.

But.... if I look at my local area in Sydney (which is at least 20% Chinese), the Chinese money doesn't seem to be coming in like it was for the past few years and up until about 6 months ago. I think their stockmarket has taken away a lot of wealth? Or maybe its all going into new apartments instead of freestanding homes? (My understanding was that generally people would bring the money in and the properties actually bought by local relos).
Or they have all been stopped from being allowed to buy by a Government? Or a combination of the above factors...

Worth monitoring.

 

I did see some at an open home on the weekend. Three cars of them arrived, but when I got into the house it turned out they were all from the same family. Apparently three generations were going to live in this one house. They were very pleasant and up for a chat.

In the last fortnight I have had calls from a few agents asking me if I'd like to buy and what I thought the house was worth. I haven't had that happen in at least a year. I'm now keeping an eye on Brisbane instead of the GC as things seem to be a bit more positive. Looking forward to seeing the next few auction clearances.

How are you all feeling about the lack of "good news" about the overall state of the worlds economy, as there doesn't seem to be anything that is positive? Is it having any influence on your decisions?