First investment property Morton Bay Area or Logan area has Logan got a bad name??

First investment property Morton Bay Area or Logan area has Logan got a bad name??

 

It does but once upon a time so did Paddington and Carlton.

Generally in Brisbane price growth moves north first so that being the case I would favour Moreton Bay. However it depends what price point and yield you are looking for. Logan definitely has it's place.

 

Maybe just do a quick search within this site and the old site on Logan vs The Bay area's ,you can go back as far as you want and see what happened to who and when..

 

Thanks for the feedback around $300.000 to $400.000 on a big block don't really have a set price would Logan be more popular as it's halfway to the Gold Coast and halfway to Brisbane I guess they both have there good and bad parts but which I really have no idea about being in Sydney.

 

On average Logan will give you more land / yield against your spend compared to the North side. This may correlate to less capital gain but not significantly as it is all relative.

It was explained to me over a very long time houses on North side have always cost more than the South and possibly appreciated a little faster. This is systemic cultural thing.

Hedge your bets and try and get one of each.

 

Do you actually think these areas will Drive good results? Buying an investment just because it fits a budget doesn't seem the best way to go. Maybe invest in shares?

 

If your budget streches to $350k + look towards closer to Kippa-Ring, Redcliffe, Scarborough and Margate. If you can get close to within a couple of blocks from the water, AirBNB (@Gockie nows her stuff) is a good way to increase yields.

Of course there is Petrie/Lawton/Strathpine/Kallangur near the proposed University.

My IPs are in Deception Bay and Petrie.

Generally pay close attention to zoning for future potential for add-value. Use this approach as well if you are considering Logan. Just be aware that infrastructure costs in Moreton Bay and possibly Logan are high which eats into development profits. Get professional planning advice and do some reading of the planning codes if interested in going down this path.

 

What kind of zoning is good for future potential? Next Gen or Urban?

 

You can do townhouses in Next Gen and you can do units or townhouses in Urban Zone.

Urban Zones are more centrally located and in theory should get better growth. They also have higher densities.

Very carefully check building height requirements specific to the location. Also seek professional town planning advice. Look for frontages 15m or wider. Take some time to read the various factsheets on the MBRC website and if braves dive into the planning codes, but it is not for the faint-hearted.

 

Hi Katie,

Where to buy would depend on your strategy, which is driven by ultimately what you're trying to achieve.

For example, if your strategy is all about yield, then Logan would be the best option for you because you can still achieve 6%+ yields in Logan areas. Highsets (or some lowsets if your purchase price is low) in Logan are known for their good yields so if this is your strategy then this could be an option for you. Do factor in a couple grand of yearly maintenance cost though because like every property you'll probably need it.

As an example I bought a 3.5 bedder highset in Slacks Creek for $327K and rents for $430/week back in 2015. These are the deals you may want to look for if you're chasing yield.

In my opinion people chose to invest in Logan area due to:
1. Generally high yield
2. Good location long term. Logan is in the triangular centre of 3 major employment areas: Brisbane CBD, Gold Coast and Ipswich
3. Affordability

Things to consider for Logan in general:
1. There is a general stigma - similar to talking to Sydneysiders about Mt Druitt. They all have a reputation and it will not disappear easily. But not all Logan areas are bad, for example Marsden and Crestmead are actually family friendly areas, or towards even better areas like Shailer Park, Daisy Hill. In general north side of Pacific Motorway are the better parts of Logan
2. On the rougher suburbs (such Logan Central, Kingston, Woodridge, Eagleby) tenants can be pretty feral/rough so you will need a good PM
(this is just what I can think of now and I'm sure the list is not extensive)

In terms of Moreton Bay, as @wombat777 pointed out, if your budget can stretch towards 400K then try go closer towards Redcliffe area. If it's 300K to 350K then somewhere around Kallangur would be an option. Yield in Moreton Bay is not as good as Logan but you can still achieve around 5.5% to 6%. If you can find anything over 6% then it'll be gold! My property at Murrumba Downs bought last year is yielding at 5.6%.

If you are buying around Kallangur however be mindful the vacancy rate is currently sitting very high and still trending up. Most of them are stock standard 3/1/1 houses competing with new 3 bedder townhouses, so I would avoid buying 3 bedder around Kallangur. Try look for 4 bedder houses instead or 3 bedder with potential scope for another room would be my suggestion

In my opinion people chose to invest in Moreton Bay area due to:
1. New Moreton Bay Rail which opened late 2016 extending Petrie all the way to Kippa-Ring
2. Proposed University of Sunshine Coast campus at Petrie which will open from 2020 onwards creating a new precinct around the Petrie neighbourhood and job opportunities
3. New massive North Lakes Westfield shopping centre with Costco, Bunnings opening up in North Lakes, servicing the new estates around the area
4. Proximity to beach - close to Redcliffe beach which is actually a really nice area

Things to consider for Moreton Bay in general:
1. High vacancy rate, in particular oversupply of 3 bedroom houses and new townhouses
2. Better demographics than Logan in general. Most suburbs are actually really nice, except I don't currently live there
3. Yield not as attractive as Logan areas
(again, the list is not extensive)

As someone who have IP in both Logan and Moreton Bay it's actually a good balance to have one each if you can afford it. In my case I chase for as high yield as possible in Logan whilst purchasing as close to the new public transport and proposed uni in Moreton Bay area.

Hope that gives you some high level idea about Logan vs Moreton Bay. Again there are plenty of threads on each which goes into depth so I would suggest keep digging into them

 

Very well thought out and well written. I completely agree on your reasoning for buying Moreton Bay vs. Logan

 

Agreed those are the rougher suburbs ( not sure about Eagleby though )...so steer away if you don't have stomach for it..

It's interesting how these 3-4 suburbs gave Logan a bad name (and mind you some naysayer really drill on these suburbs)... while there are literally 20-30 suburbs to chose from. Logan City has 60+ suburbs....

 

Good informative post..
however I disagree with Kingston and Logan being rougher than Slacks Creek.
Firstly I would be careful where I buy in relation to the old toxic mine in Slacks Creek.
Secondly there is the same demographic in Logan/Kingston as Slacks Creek. It's not Milton vs Logan we are talking about.
There are better pockets than others sure.. but I wouldn't go so far as to generalise to the extent of saying ALL of those suburbs are worse than Slacks Creek.
One of mine in Kingston is snug between 2 private schools on 814sqm block. Nicer area than most of Slacks Creek.

Your post was informative but I felt brushed over the following point:
With Logan region, all buyers should know exactly what pocket they are buying in. They vary km to km. You need to really have some good knowledge of the area, not just purchasing sight unseen based on RE add.

Also, yield comes down to the quality of asset, knowledge.
I knew that my first Kingston but was well under rented. Dirty and had long term tenants, lazy non attentive landlord who let them stay at that price.
I knew it was legal height, agent didn't know as he was not from area, selling from Ipswich.
I knew the block size would enable me to add value at some point in the future.
Based on facts of the add, $350 per week on asking price of $319k was not a good deal.
But $450pw on $305k purchase, with potential for increased rent after a $10k spruse up is a much better deal..

You really need to know the potential of the property, don't accept the RE add yield and current rent as gospel.

Knowledge and patience will source a good deal.

I've seen plenty of buyers of late buying properties in the region in the $320-$330k bracket - no ability to build in, small blocks, not in a favourable pocket, renting for $330pw. Crazy.
These are not deals, this is FIMO and people hoping for the market to continue its current trend.

 

3 bedroom houses in Kallangur don't sit vacant. It's the 3 bedroom townhouses. If you have a 3 bed house on 600sqm block that is not well tenanted you have a bad PM.

 

Hi Greyghost,

Thanks for pointing out the areas in my post that I haven't covered in detail, as well as sharing your personal experiences so that the wider audience can benefit from your knowledge/experience too. I'm sure we all appreciate this

And thank you for pointing out about the toxic waste in some of the Slacks Creek area (which was actually Kingston before). For those interested you can google "Kingston industrial waste incident" to get more details. As a rule of thumb, try avoid streets with "diamond names" such as Pearl, Ruby as these are streets with toxic waste soil.

The only part I'm confused is where did I mention Kingston and Logan Central are rougher than Slacks Creek?

 

Hi Al1979,

When I have a look on RE.com.au I can see 38 entries returned for 3 bedroom houses in Kallangur. Whilst a good portion are townhouses, majority of them are houses with a block of land. With the influx of new 3 bedder townhouses I believe it will certainly have an impact on rental demand for houses.

I just want to highlight to those who are looking at entering the Kallangur market with 3 bedder house/townhouse - be extremely cautious because you're in with a lot of rental competitions!

 

Just did a quick search then, and I'm seeing mainly townhouses. The majority of the free standings are up further north further away from the amenities. It also seems the vacancy rate has come right in to around normal levels @ 2.66%. Late last year they were up on the 4s. Why this is I do not know.

 

Hi piskywolf,

I'm seeing 4.3% from SQMResearch though
Where did you find 2.66%?

 

Good post..nit sure about point 2s impact on the RE price of Logan..yes it is near the middle of the three but that may not translate into a significant upward push. Unknown at this point..long term, yes probably..could also be that the three centres (Ipswich, gc, and bcc) will independently have greater growth, which I think will be the case mostly based on jobs growth driving those areas.

 

I was going off Real Estate Investar. Not sure of how reliable it is
What would be useful though is if you could break the rate down by property type.