I've been reading conflicting views on buying and holding a unit in Brisbane. I'm a first time investor and would be looking to buy something around the 10km range from the city close to a train line. As it'll likely be held for the long-term I would be looking for the ongoing rental income to be the main purchasing factor, as opposed to massive capital growth, which I know units aren't great for. What are the negatives about doing this?
You might not make any money. You might make less money there compared to other investments you could have bought into. I mean the point I'm getting that is that its a bit of a 'piece of string' question and answer. A better question is why you would even consider that sort of investment over something else?
Oversupply of units - would it really be ongoing rental income? Check vacancy rates at sqmresearch SQM Research
As a first time investor I would suggest to focus on buying property that will give you capital growth, not cashflow. You can always add some cashflow property later on but you will find yourself struggle to expand without the CG as it does take a while to save. Cheers, David
You need to ask yourself why the majority of folks in Australia don't reach their goals of passive income/wealth creation with real estate. Having a solid plan, strategy, knowledge, and taking action is hard enough to achieve most goals. Now imagine your chances without any of that.
Personally I think location is key so am willing to compromise and consider units. When looking at units a few things I like to look for is if it has a larger land value i.e. a unit that's 1 in 4 as opposed to a high rise. I also like to look for older builds and lower fees i.e. no pools, lifts etc. But it could all depend on how you see this purchase fitting into your longer term strategy and what you can afford to do.
Agree with you 100%. You have summed-up what I always thought: Location, Layout, Structure, Simplicity. And most importantly, longterm vision.
That's the problem,a lot mostly by reading what the media tells everyone they think all units are in the same box.. I know several young people mostly mates of our daughters plus our daughters ,and from as a new investor and as a financial perspective have done very well with the units they have purchased over the past 20 months most proved a master stroke of timing .. But they never bought into the new slick multi levels otp unit complexes ,just inner south--side brisbane -- blocks of 4-6 brick walk--ups on blocks above 800sqms zoned lmr and one day high level developments sites One i know the unit she purchased was just above 310k wiwo--block of 4 above 800sqms but not zoned lmr ,2 units in that small block --two has been have been sold over the past year the first one 9 months ago went for 420k ,the other was just settled a week ago for 400k and despite the traditional perceptions that's 100k c/g in 14 months,some of those high rise units in the cbd are the same price as they were 1o years ago.. One you understand the that real estate media is a contact sport with the added hint of the vulnerability and fear ..imho..
Hi square, one of the things that i think about is that when someone has developed a block of units at least one party has made a profit. But not the buyer of an individual unit. The seller of land and the seller of units in a block (ie. developer). In my experience not many developers or profiteers of any persuasion leave money on the table. So when i look at a Unit i think someone has already maxxed out the profit to be made. The new builds that i see are more houses making way for townhouses instead of units making way for ............ drum roll ............... units. So i don't think investing in a unit is a profit making activity. It is a revenue source only, usually to pay a mortgage or because someone has plenty and just wants an income stream that won't disappear early. I can't do the maths where someone makes a profit, and then people walk in and make more profit. At some point it is all profitted out. and is just a depreciating asset. Would a developer ever create a building that genuinely produces healthy profit for its owners? Why wouldn't they just keep it? So i would say don't buy a Unit. We all know there are too many they won't go up in price etc etc. Keep your other ideas though, near train station, locations (south side?). If you get a different type of asset you can still go for income stream, nothing wrong with that, just avoid a unit. my 0.02c.
