Buying a townhouse with lot future development in neighbourhood

I am looking to buy a townhouse as IP in stage 2 of development. Stage 1 had 8 townhouses(all sold) and similar number of townhouses are available in stage 2.

This development is happening at an end of street. During inspection, I was notified that the same builder is doing development of additional 32-40 townhouses. I could see the land is currently being prepared.

I am concerned how I will hold value of my property and continue to attract people for rental when they have plenty of choices of brand new townhouse in 2 years time.

What is people's advice who have investment experience?

 

Suburb and price point?

 

Coomera Qld and the price is $400k

 

Then its not just the development. That whole area is a supply risk.

Why there? Sales guy talked about rental guarantees and depreciation?

 

It was recommended by investment manager. Why the whole area is supply risk? Google search suggests decent future growth but will like to hear from someone who has IP around that area.

 

Because theres also a LOT of land out there. Even if the population grows, it can be easily absorbed so wheres the growth going to come from?

Who is the investment manager affiliated with and how do you pay them? Do they also help you with legals and loans?

 

I am not paying the anything. They were referred by my loan broker. This bloke is GM of this investment advice company

 

So how do you think this GM makes his money? If you are not paying him, how does he eat?

 

He is getting half commission from the person who is acting on behalf of builder to sell these townhouses.

 

Do you see this as a conflict of interest?

Where did you find your loan broker?

 

Well same townhouses are also being managed by 2 other REAs and this investor manager is aware of the fact that I am continuously seeking prices and growth potential information from other REAs so he can't bluff.

Loan broker is from Loan Market.

 

Youve identified supply as a risk. Has the gm suggested any other properties?

Side question. Do you own your own home, and what was the suggested loan structure for this?

 

Yes other property was proposed in Thornlands but looking at recent articles, I noted Coomera is going to get future growth due to new Westfield and also build of new High school.

I currently own a home and it equity was used to get home loan for IP.

 

@Sady.Sydney

Trainee has highlighted some very important issues with the type of properties you are looking at.

These are sellers agents.

If you are starting out, it may be worth engaging a buyer's agent who can help you out, and you can learn along the way.

If there is a large supply, not only you will be paying with lower growth but potentially high vacancy.

 

That's all I need to see to know to run away. There's probably another 50 reasons I could find to run.

 

Have you ever actually been to Coomera? Coomera is just one suburb in the huge Brisbane to Gold Coast corridor. There are vast areas of undeveloped land.

“Future growth” is a vague term and applies practically everywhere for varying reasons. Future growth does not automatically mean rising prices, it may mean just more building going on.

If you must buy a Coomera townhouse, buy an existing one. You won’t pay the developer and spruiker premium, will see the actual finished product, and maybe get an existing tenant for income from day 1. And, see below, you will save yourself well over $100K.

A quick realestate.com.au for Coomera, Townhouse, 3x2x1 showed 5 for sale at $279K. One even has a second car space, and is tenanted at $350 per week. Buy one of them.

5 rentals advertised $370-$395 per week.

I reckon you would be far better off in Thornlands, close to Brisbane employment opportunities and just about fully developed so scarcity will mean continued demand as bayside suburbs are popular.

 

Semantics surely..

Ok..ok..