Hi everyone, I am looking to purchase my first IP. Budget is 500k and focus is on capital growth - I am happy to absorb a negative cashflow at this point in my life. Looking for detached houses (not units). I have a growing interest in development so something with future potential in that field would be nice but is not essential. I don't think 500k is enough to get into traditional high CG markets of Melbourne and Sydney, but some other locations I have considered are Geelong, Bendigo, Adelaide, Brisbane, Perth, SE Queensland. Any comments on these or other possible locations would be appreciated. Thanks.
Welcome mate Of the areas you've listed, Geelong looks good to me, as well as the Northern tips of Brisbane City LGA. Maybe add Newcastle & Central Coast to your list, although $500K is quite a skinny budget for a quality property in these areas. Another $100K would be ideal if you can stretch this far? I find a lot of people nominate $500K as a IP budget- Maybe a psychological price point? Is this your borrowing capacity or a number you have set yourself? An A grade property in a really solid NSW regional (eg Orange) could also be a good option, and within budget. Agree houses rather than units in these areas will help you deliver your capital growth objective. I like the fact you are willing to cover some holding costs to buy a property located in a Suburb that will actually grow, as opposed to some of the horrible high yield/ cashflow+ junk stock that is so commonly spruiked by facebook buyers agents & punters these days.
A $500K budget for a capital growth strategy would suit specific pockets in Greater Brisbane - especially if you are targeting a single dwelling on its own lot. We especially like the northern corridor where the future broad hectare land supply is limited so there is low risk of future over-supply in the housing market. There are also certain pockets where you can still buy houses that have superior land zoning so that you have the potential to re-develop or subdivide in the future with your $500K budget. Lots of opportunity in our City
We just picked up a site in Zillmere for a client: Purchase Price: $510k Rent Return: $480 per week It's on a 610m2 splitter block. I would suggest around North Brisbane unfortunately that price point is very hard to get into to, we found the above property off market. I would suggest building up some good agent relationships if you target North Brisbane. Another thing I would suggest is looking a pre war homes, they are great for picking up and renovating. Hope this helps.
Gus this may sound totally out of left field but a house in Darwin or Palmerston. There should be capital gain as NT market runs countercyclically to other markets (it usually rises after WA moves). Prices have been depressed for a long time. Rents are starting to rise. Vacancies beginning to fall. NT open to NSW after 9 October and will receive a lot of tourism. A lot of expenditure coming on gas and defence. I would hold for a capital gain and exit in about 2 years time. Trade it like a share as the Darwin market is very cyclical. Herron Todd White October report will probably state start of recovery because house prices have bottomed and are now just beginning to move. Can buy a decent house in Palmerston for 400-450k which will rent for about 400-450/week.
Hi Nathan, QUOTE="Nathan Prasad, post: 926208, member: 28510"]We just picked up a site in Zillmere for a client: Purchase Price: $510k Rent Return: $480 per week It's on a 610m2 splitter block. I would suggest around North Brisbane unfortunately that price point is very hard to get into to, we found the above property off market. I would suggest building up some good agent relationships if you target North Brisbane. Another thing I would suggest is looking a pre war homes, they are great for picking up and renovating. Hope this helps.[/QUOTE] What is your view on a subdivision block that is above 600k+ in zillmere for a long term hold. The house is decent with rental appraisal around 550/w. Thanks
What is your view on a subdivision block that is above 600k+ in Zillmere for a long term hold. The house is decent with rental appraisal around 550/w. Thanks[/QUOTE] It really depends on location, lot frontage and slope of the block. If ticks all the boxes it could be possible but that is a lot to pay in Zillimere, I would really make sure you run the numbers.
That is what I thought too. A bit high for Zillmere. Trying to justify the price 4-2-2 on a 900m+ block as I can't find anything similar sold in Zillmere in recent times. Otherwise It ticks all the other boxes.
Factors contributing to capital growth are properties with land component [preferred], near good infrastructure, surrounding amenities [shopping centres, eateries, parks], good schools, in a well-developed, well-managed suburb with higher ratio of owner occupiers. Given your price point, you might be lucky to chance upon run-down houses close to middle-ring Melbourne, then be prepared to create capital growth through renovations. If new houses are sought, you might have to look further out. I had tried both. My IP in Manor Lakes [approx. 30km from Melbourne city] has checked all the boxes. It is one of the best performing one within my portfolio, given the consistent capital growth over the years [despite covid and financial downturn] and low rental vacancies. Somehow, renters with families who lived there want to continue living in the suburb and they save up to buy their own Manor Lakes house. This is a niche market in a suburb with very strong community pride and spirit , so much so that they had successfully petitioned to change the name of Wyndham Vale Station to Manor Lakes Station.
