QLD Brisbane unit blocks

Hi All,

I’ve been reading the forum for several years and appreciate all the wisdom shared. I understand that units in Brisbane are seen as a poor investment by many on the forum. However what about small blocks of 3 or 4 units for a long-term hold? As an example: https://m.realestate.com.au/property-unitblock-qld-nundah-133135218
They seem like a good way to get gross yields of 5-6% while obtaining decent blocks of land. Is there something I’m missing?

Thanks

 

The reference to Brisbane units is about inner-city units in newer blocks, plenty of investors enjoy the older 3 storey walk-up or entire blocks where you have total control.

Knowing very little about the location but a few casual observations:

• Small block, tick
• Should fall under resi lending, tick
• Returning 5%+ gross, tick
• Close to transport, tick
• Too close to airport to experience overhead traffic, tick
• Close to creek - is it floodprone/can you get affordable insurance?
• Is it too close to rail/airport?
• Is the rent comparable to market for 3/1/1 with external/shared laundry?
• What's the vacancy rate for units?
• Are there lots of newer units around/in adjoining suburbs?

 

For that yield I would prefer an individual unit. The idea is they will have a bigger pool of buyers when you eventually sell.

If you own the block you want something low maintenace obviously.

Take a grand off for the cost of gardening. Ensure each has seperate water metering.

 

Buying that old block of 3 units for $985k, even though Nundah, may be beaten by buying 2 x $280k separate houses in Logan and building a granny flat in each. Will come under $900k and better rental yield.

 

It's getting really tricky to get unit blocks returning 5% rental yields.
The way it has worked in the past is finding unit blocks on really good land plots say LMR3.
What you do is fix up units to get the yield up from 4% to 5%. While it's renting you put together a DA and then on sell to a developer or develop your self.
I can tell you now though, in Brisbane unit blocks are getting expensive and you only get yields around the 4.5% mark. I would recommend just getting stand alone houses. Less stress and more land. You can even get LMR sites with houses with 4.5% yields in good locations.

 

The yields can be good if on one title but be aware the only item you seem to get any economy of scale on is rates! Insurance, pest control, repairs etc everyone bills you per unit. And all the hot water systems seem to go at once (rant rant)

 

Are you saying 4.5% gross for unitblocks? I was looking for the whole year, I think most of them are priced at 5% gross. A good BA can get you 6-10% off market deals, depending on the locations, etc though

I love Brisbane inner city unitblocks, if you buy well, in good location, you still can get good CG while already getting good CF. I think it is one of the best strategy in town, will beat most houses on ROI long term for sure.