QLD First Home To invest in

Discussion in 'Where to Buy' started by Bones, 6th Jun, 2020.

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  1. Bones

    Bones Member

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    Hi all,

    Hoping to get some advice from everyone

    My situation is, i'm 23, and will be set to earn ~95 to 110k (depending on overtime) this year. I have ~20k saved in the 5 months i've been working.

    Given the current circumstances with the 25k grant till 31st Sept, i decided now would be a good time to find a first home which after 6 months will become my first investment property. I have been pre-approved for $450k to 600k depending on the bank, but i would like to stick to a loan amount <450k giving me a total budget of $500 to 510k (also want to maximize the $0 stamp duty).

    I've been researching the market, and i've realised in Bris my approach should be to go for a fringe suburb with good infrastruture with low vaccancy rates. What i've found is Kepera, Carseldine, bal hills, bracken ridge the prices for a new H+L ~500 to 550k mark.

    My question is should this be what i go for or should i look elsewhere as well? (i.e. Pallara, springfield, mount gravatt etc - keep in mind to maximize the first home stuff it needs to be a new build)
     
  2. Trainee

    Trainee Well-Known Member

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    Grants etc should not drive your investment strategy. The grants are to stimulate building, not necessarily good investments.

    all you would be doing is passing the grant from the government to the builder.
     
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  3. Bones

    Bones Member

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    That's a good point, though 40k equity is still 40k equity that i don't need to save up.
     
  4. Trainee

    Trainee Well-Known Member

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    What equity? Dont kid youself. Thats profit to the builder and gone from your hands. It wont show up on a bank val and you wont get it back if you sell.

    problem with new h+l in an outer suburb is that the costly new building depreciates, and the land wont appreciate for years because its competing against lots of new supply. Makes renting it out harder too.

    that depreciation you are relying on to help with cashflow? Limited if you live in it first.
     
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  5. Bones

    Bones Member

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    40k equity i meant as in the government grants (15K BHOG + 25k Homebuilder grant).

    While your point is true that H+L in fringe suburbs is at risk of a market flood with future developments - majority of the land in bald hills and zillmere (especially) are all already built on and only subdivisons are comign onto the market - hence my logic for going fo rthem.
     
  6. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

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    Im a little confused, you note you've been pre approved for 450k to $600k. How many pre approval you have and why the big variance?

    Also you have $20k deposit - that doesn't show the 5% genuine savings you need for the price range noted.
     
  7. Bones

    Bones Member

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    Nab stated 450k, BOQ Specialist stated 500k with 100% LVR and no LMI. Commbank stated 600k with LVR of 95% but interest rate of 3.9% (which i would never take). Within my next 2 pay cycles i'll have 25k saved for a 5% deposit, regardless.
     
  8. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

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    So NAB or CBA didn't ask for the 5% genuine savings that needs to be on your bank account for 3 months ?

    Seems like they gave you an indication of how much you can borrow rather then an actual approval?
     
  9. Bones

    Bones Member

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    CBA did, sorry i should've specified it's NAB Health (the doctors lending branch) they stated as long as i could prove my income stream they would approve up to 450k (@95% LVR) I was going to go with BOQS to begin with though
     
  10. Spiralkut

    Spiralkut Well-Known Member

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    Got no idea about available land in Brisbane but Petrie or as close to is a good investment.
     
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  11. db9

    db9 Well-Known Member

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    What are your goals and how would this property fit in? Out of all of those my pick for cap growth would be a good spot in mt gravatt.
     
  12. Bones

    Bones Member

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    I'm hoping that after the intial 6 months i live in it, i'll be able to rent it at or slightly above the mortgage payment and generate cash flow.
     
  13. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

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    Gotcha, have you tried ANZ ?
     
  14. Bones

    Bones Member

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    Haven't tried ANZ yet, to be hoenst i'm very new to this so i'm not even sure if i cna negotiate the rates (can I ? )
     
  15. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    Hey Bones - welcome to the forum :)

    I’m glad you’ve found your way here and it’s awesome that you’re starting your investment journey so young.

    You mention wanting cashflow from the property, which is fine - how does that fit with your long term goals?

    At your age, and with your long term income prospects, you’ll want to be sure it’s gonna grow as a first priority, or it’ll take up valuable space in your portfolio. It may be cash-flow now, but a rate rise or two and that CF is gone...so you want to make sure it’s in an area that’ll grow even when cash flow fluctuates.
     
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  16. Nate7invest

    Nate7invest Member

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    I purchased my first investment property in Keperra recently with a similar budget to you (500k) but my strategy was slightly different to yours. My strategy was to buy below market value with the largest land component as close to the cbd as possible, to achieve this meant looking past the first home buyers grant as it didn't apply to any of the properties I was targeting as new builds had a smaller land component and didn't fit my budget. I would be more concerned about buying for potential capital growth in a good owner occupied area rather than focussing on cash flow
     
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  17. Bones

    Bones Member

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    In the future as land decreases were you planning to subdivide or similar?

    I've found that in the start of bald hills i can get a H+L (seperately) ~500k, from my resaerch it seems like a decent area for cashflow
     
  18. boganfromlogan

    boganfromlogan Well-Known Member

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    Maybe include Rochedale, and Rochedale South? Rochedale has plenty of land still available, Rochedale South not so much. I quite like your strategy, but i would advise you to buy as much land as possible (larger block) be as close as possible to major infrastructure (near not 'on') and think about key attractions (schools, CBD, urban renewal, airport etc).
     
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  19. Tom Rivera

    Tom Rivera Property Manager Business Member

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    Hey @Bones sorry I missed this earlier in the month. I'm a Property Manager but my business partner is a small builder AND we're also looking at taking advantage of the government incentives ourselves this year!

    To maximise your stamp duty benefits you need to keep your land below $250,000, which you will not find in most/all of the areas mentioned above. A quick look on Realestate.com shows some possibilities in Acacia Ridge, Ellen Grove, Doolandella, Richlands, Pallara and Karana Downs. I actually think they're all ripper areas well worth looking at. I definitely think you should consider some regionals as well- I can't help with the Northside but I believe there's some good areas up there to look at. You will want to be careful where you invest in a regional though- for example, Yarrabilba hasn't been doing so well of late....

    You'll need to build a 4-Bed 2-Bath 2-Garage and will probably also add a second living area. The build is going to cost you somewhere between $220,000-$250,000. I don't care what anyone says, budget an extra $10,000-$20,000 of upgrades to make your property stand out against the competition. These can be really simply things like slightly nicer carpet, a 900 wide stovetop, black cabinetry handles, pendant lights in the kitchen and a flashy front garden (low maintenance).
     
  20. Angel

    Angel Well-Known Member

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    I'd go Bald Hills and Carseldine over Zillmere any day - similar train line but much different reputations. There is a new estate close to the Bray Park station in MBRC if that would suit. The Grahams Rd estate at the other end of Strathpine is too far to walk to the train station.

    I agree with what Tom said about upgrading your new house to something that has that little bit more wow factor than the standard cookie cutter hot box on 300m2 that all look the same.