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QLD Brisbane or Logan or Moreton Bay?

Discussion in 'Where to Buy' started by Shoryuken, 18th Jan, 2016.

?

Where to invest in QLD?

  1. In BCC - 10km away from CBD (eg: Chermside, Keperra)

    24 vote(s)
    36.9%
  2. In LCC - (eg: Slacks Creek or suburbs nearer to Logan Central)

    16 vote(s)
    24.6%
  3. In Morton Bay region (eg: Petrie, Kallangur)

    15 vote(s)
    23.1%
  4. Redcliffe/Scarborough

    4 vote(s)
    6.2%
  5. None of the above, there are better options

    6 vote(s)
    9.2%
  1. Shoryuken

    Shoryuken Active Member

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    Hi Fellow PC members,

    I've been trying to select an area for getting my next IP. The issue is I will need to purchase this before end of Feb (go unconditional with the bank loan), so the timing is tight and I still can't make up my mind. Any suggestions or advise would be really appreciated. My budget is under 500K (ideally around or under 400K). I would like a property that is cash-flow positive and at worst neutral, but not negatively geared. I would like to hold this for at least 10 years, and would hope to get decent capital growth over the next 3-4 years so the equity could sponsor my future IP purchases.
    My question is should I buy a house in:
    1. Areas like Chermside or Keperra in BCC (overall growth in Brisbane?)
    2. Areas like Slacks Creek or somewhere near Logan Central in LCC (ripple effect from Brisbane growth?)
    3. Areas like Petrie, Kallangur in Moreton Bay (the new uni, hospital and rail line?)
    4. Or perhaps areas like Redcliffe or Scarborough (sea change + new uni and hospital in Moreton Bay region)

    EDIT: I'm a Sydney resident who has never lived in QLD (only travelled briefly), so not familiar with the state
     
    Last edited: 18th Jan, 2016
  2. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    You may be hard pressed to find a CF+ in the BCC - what yield do you classify as CF+?

    In the past 15 months I have bought a property in each of those council's you mentioned. As a high-level overview:
    BCC (Bracken Ridge): PP $379K, Yield 5.5%
    LCC (Eagleby): PP $258K, Yield 6.2%
    MBRC (D-Bay): PP $232K + $15K reno, Yield 7.3% (expected)

    I like MBRC personally, as it offers low entry priced properties, and can see good medium term growth, with the amount of infrastructure investment. You can find strong yielding properties especially if you're will to do some reno's.

    You could potentially buy a couple of $250K properties (one in LCC and MBRC) both with +7% yield. I believe all three areas you have mentioned will have short-medium term growth. I hope you can find some beauties within the given time frame.
     
  3. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Wow... such a low purchase price!
    Is it a freestanding house? How much land?
     
  4. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    On +680m2 block of land.
    Freestanding house - must've picked it up at almost land value.
    I'd have to say it's probably my best purchase to date. Once reno is complete and we get a bank reval (hoping done in 4 weeks), I will write up a post on here.
     
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  5. Shoryuken

    Shoryuken Active Member

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    Thanks Taku for the detailed response!

    7% and above yield is what I'd like. If 7% is too difficult to achieve in my tight timeframe then I'll also be happy for the yield to be between 6% and 7%.

    Love your idea of buying 2 properties but it might be tricky as we might be a bit stretched with 20% deposits on both with stamp duty + reno costs if any.

    If you were to pick one area, would you pick MBRC (as you mentioned in your post)? Should I look for properties with dual-living or dual-living potential? In my visit to QLD and driving around, I saw so many properties where the downstairs (rumpus/utility rooms) have been converted into a second living.

    Thanks again.
     
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  6. Santaslayer

    Santaslayer Well-Known Member

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    Why are you tight for time? AIP's can always be extended.
    You may get yourself the wrong property due to the pressure of buying in such a tight timeframe.
     
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  7. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    Yep, personally for my current situation - I would pick MBRC and then LCC. This is because I'm looking at sub $300K properties with +7% yields.
    The reason I like MBRC is the infrastructure investment being poured into the area. It has solid population growth. It's close to the water i.e. scarcity of this type of land. Near North lakes which is becoming big retail/shopping hub outside of CBD. Petrie University most likely happening.
    Train line going in, although I am aware many locals have noted they don't embrace trains, however in a few years I believe this will change. As roads in Brissy become more congested, I reckon locals will turn to trains - it just takes a little time for them to come around.
    And the affordability makes it attractive for me also.

    I'm predicting there probably won't be great growth in the area this year, so reno's to manufacture them instant equity gains is necessary.
     
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  8. Shoryuken

    Shoryuken Active Member

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    It's complicated! I was about to write a diplomatic response, but I'll just tell you the truth instead.
    My wife had to resign from her job because of constant pregnancy related bullying and harassment. Now with a baby on the way, we wanted to buy one IP before having a bit of a break until the future IP's. The pre-approvals are with both our incomes and now with her payslips stopped, we don't have much time. It's either that, or we re-assess our borrowing power with only me as the earning member of the family and my wife as a dependant. Or we don't buy at all for now. Missing out on Western Sydney, we didn't want to miss out on Brisbane :)
    Baby on the way and single income for a year or so is the main reason we want a cash flow positive property (worst case scenario a cash flow neutral).

    Thanks.
     
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  9. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    I'd want to see some good compensation for this.... did you get some legal advice?
     
  10. Shoryuken

    Shoryuken Active Member

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    This thought keeps me up at night. I'm thinking about using the services of a good BA, but my wife doesn't seem too keen on the idea.
     
  11. Shoryuken

    Shoryuken Active Member

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    Not yet. My wife is quite an emotionally and mentally strong individual (way stronger than I am). She had made up her mind that she was not going to get intimidated as she knew what her employer was trying to do. Then came a complication in the pregnancy which really broke her down. We were advised by the hospital that stress is the last thing she needs (as we'd told the hospital of her employer). So we decided to resign. If we saw a lawyer and sued them, it still meant she'd be thinking about it and feeling angry and upset. We made the decision to put her health and baby's health before anything else. We were both really angry and frustrated but think that we made the right choice. In saying that, we have kept all the intimidating emails and evidence and might do something about it after the baby is born.

    EDIT: To clarify, it wasn't another employee doing this. It was my wife's boss and the HR person. It was a deliberate tactic to put pressure on her and make her resign as they didn't want her going on maternity leave while they'd have to pay for her and then get a another contractor in to do her work.
     
    Last edited: 18th Jan, 2016
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  12. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    :)
    Absolutely... Sounds like its best for her and the baby. She doesn't need any additional stress. Pity it makes your investing timeline shorter but its the circumstance you are in and I completely understand the choices you have made...
    Good on you for keeping the evidence...
    Bullying is not on...

    Slightly different but I know of people who have been made redundant while on mat leave, but they werent made redundant because of it, it was all just timing (other people made redundant at the same time). And I know someone who was pretty much made redundant the week after coming back from extended leave (which he used to enjoy after the birth of his new born baby too)! What a shocker....
     
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  13. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    What the?!
    That's even worse! The boss and HR person.... they should know better...
    I hope karma (or legal advice) goes and bites them on the backside...
     
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  14. Azazel

    Azazel Well-Known Member

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    It's a good thing for the area.
    When they start, they will be just as full when they arrive at Central as the other trains.
     
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  15. trinity168

    trinity168 Well-Known Member

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    We used a BA for our Brissy purchases in 2015. Happily worked with them with the purchase With the Bracken Ridge property, a 3 br house bought in 3rd qty 2015, gross yield 5%. I think we engaged them around winter and settled in Spring.

    Just for easy calc:
    400K property + finders fee (BA fee)
    3.7 % increase in price for the IP
    12K gain in the last qtr.

    upload_2016-1-18_20-35-20.png

    Houses for courses. Good luck. And with regards to your wifey's employer ... that is terrible bullying!
     
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  16. JDP1

    JDP1 Well-Known Member

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    You did the right thing...
     
  17. Bran

    Bran Well-Known Member

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    OMG.
    1. This shouldn't happen.
    2. Pregnancy based discrimination? Cha-ching.
     
  18. Shoryuken

    Shoryuken Active Member

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    A lot of people who know our story have told us this. But proving it was pregnancy related is a challenging thing. We read up quite a bit on the internet (there's heaps of it on the internet and it was sad to find out that it happens very often unfortunately) and found out that a lot of people took the legal path only to get dragged in for years and years and not getting much out of it. Unless you have it in black and white writing (example:"Because you are pregnant and we don't want to pay your maternity leave, we're demoting you and later we'll review your performance and if not good you'll be made part time" or "Because you are pregnant, you seem to be wasting a lot of time in the restroom"), it's apparently very hard to beat a company.
    My wife's employer already has a discrimination case ongoing and it has been going on for more than 2 years already. From what my wife told me, it didn't affect anyone at work. They just let the company lawyers do their job. People have advised us that the real way to hurt them would be to go public/social media. But we need to be careful as the last thing we want is to get sued for defamation.
     
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  19. Ember

    Ember Well-Known Member

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    You did the right thing moving on.
    The budget of 400k ish is a common figure and tricky one. The votes are coming in for within 10km to Cbd but the budget will need to stretch closer to 500k to buy a house there. If you decide to spend less on an outer district it is especially important you visit the area to make sure it is what you are seeking. There are many suburbs that look ok on the internet but are no good in reality.
     
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  20. Tenex

    Tenex Well-Known Member

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    Just out of interest for those who think QLD in general stands to gain long-term capital growth, what do you base your data on?

    It is a genuine question of mine. With mining companies already making people redundant, the current resources and raw product prices and many houses affected by flood map, exactly what reason is going to ensure long-term capital growth anywhere in QLD?