QLD Brisbane: town house or house

I am a new investor from Sydney looking to purchase in Brisbane. For 450k would I be better off going for a town house in the inner ring (I've been looking at Indooroopilly, and Auchenflower); or to buy a free standing house a bit further out. (I've looked at Everton park).

My main goal is capital growth.

Any tips would be great, and suburbs to research. Thanks.

 

If your willing to spend some $ on renovation then a house on a decent land component where you can add value could provide both equity and additional cash flow. Long term if you buy with a high land price to asset ratio you should do well. A $450k townhouse still wont get you alot inner ring and typically there will be no shortage of supply no matter where you buy. That said, a well located townhouse could outperform if there is some kind of unique aspect to it (uninterrupted view, large garden area). Think about the laws of supply and demand with land being the key variable dictating supply. A townhouse where you could rent by the room to students will provide good income as food for thought. The suburbs you mentioned could offer that being near the train.

 

If you could get a house in Everton park for $450k I’d be shocked.. and impressed!

Funny thing is I had exactly the same dilemma 18 months ago. My weigh up was house in Everton Park, or townhouse in morningside/hawthorn (as I wanted to live there)

Went with Everton park. Looking back, my house In Everton has gone up 14% and I’ve had 4 letters from agents saying they have buyers for it, townhouses in morningside/hawthorn have come down $40k..

I have actually used the equity to eventually buy hawthorn anyway at a good price but if I had gone townhouse first I’d be $40k in the hole & 1 property less.

 

133 Pullen Road, Everton Park, Qld 4053

There's a few properties like between 450-500k. All could do with some doing up, but on paper can you see anything wrong with a house like this?

 

Ah yes. Sorry you will find quite a few around that price, but are all on main roads. Pullen road, south pine road, great northern road, etc.

Not investment grade IMO. Discussed here also Investment Brisbane suburbs

 

Everything I've seen and experienced of the Brisbane markets leads me to conclude that generally speaking the best dwelling type for CG you can buy in Brisbane is a free standing house on a 600sqm lot or above . Older home with add value potential in a good OO area.

 

Couldn't agree more... the land is going to be worth more value over time

 

I would target house with decent land component plus value add potential as a preference, even if you have to go a bit further out. Got a client who bought a townhouse at Everton Park back in 2015 and to-date value has barely moved. That's not to say price will not go up for townhouses, but a property which you can actively add value in the current environment will be a winner.

Cheers,
David

 

I've been reading a bit about about Bracken Ridge and Brighton. Have you guys heard much about these areas or would you recommend aiming for closer to the city?

 

$450k townhouse in Indooroopilly or Auchenflower ... no chance sorry mate

 

T

There’s a couple there. Ashgrove a little further Out is actually ok value for a townhouse under $420k

 

Send me the links to the ones in indro/ Auchenflower for that price ?

 

Brighton seems to have a decent rep in this forum when it comes to outer-ring suburbs. Further out but quite an attractive looking suburb that hugs the coastline. From what I've seen you'd probably need $500k+ to get something in need of renovation there to be investment grade.

Bracken Ridge has it's supporters and detractors but you need to be discerning because like a lot of places it has pockets (I've actually got saved to file a whole lot of PC forum discussion pertaining to this suburb if you'd like me to PM it to you).

The consensus on this forum for outer-ring Brisbane houses seems to be that good location and land component is key, but so are renovation/value add strategies. Without the the latter you will still make CG in the long term but not the kind of gains to be considered investment grade ie more desirable in the short-to-medium term.

 

Good advice, but I would choose the 400 in a great location over a 600 in an ok location. The value add is multiplied by the desirability factor of the location and this becomes more true as the city grows and infil less common.

My point is that I think the same spec 5/3/2 with pool on a 400 or 600 in the same street won’t be too far in price. The frontage on the 600 will give you style options but if developing you’ll likely end up with more yard but similar sqm living. The upper limit of your asset value will be determined by the neighbourhood. The exception is in the case where your location requires a large home around stately homes - ascot/hamilton etc. In those cases I would not want to be the rare 400 block owner. But surrounded by 600s, no dramas! I’m interested in your thoughts on that?

For the majority of people with average income potential and average risk appetite who may only end up with their PPR and 1 or 2 IPs and may not have the cash or confidence to develop. I would advise free standing/detached location location location as the first foot hold in Brisbane.

 

@QldKoolies
I would largely agree with that sentiment, however it obviously also depends on the build. I was talking to one of my Brisbane architects the other day about this and basically a 405-415sqm lot in a great location when compared to a 600sqm in an inferior location will generally perform better. Also, the trick on a 400 lot is to maximise garden aesthetics and functionality, whereas many larger lot owners tend to neglect this area as they think having a larger lot will automatically out price a smaller lot. Definitely not the case.

However in saying all this, it has to be apples compared with apples in the suburb. If most buyers specifically want a larger lot ( and price reflects this) then it's something that cannot be overlooked.

 

I guess the key word is functionality. I've read that high-maintenance gardens are never a good thing for IP's because tenants don't have the incentive to make the time to tend to there upkeep? This might be different for more expensive IP's targeting a wealthier demographic though.

 

I generally only target higher end OOs. But that doesn't mean the garden has to be high maintenance either. Low maintenance, good asthetics and functionality is the perfect mix imo.

 

That would be amazing if you could send me the Bracken ridge info. Thank you!

 

Hi George, would you mind sending me the Bracken Ridge info as well? Thanks.