First IP: Adelaide vs Brisbane vs Regional?

Discussion in 'Where to Buy' started by Blaz1ingGooch, 13th Jul, 2020.

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  1. Blaz1ingGooch

    Blaz1ingGooch Member

    Joined:
    20th May, 2019
    Posts:
    13
    Location:
    Adelaide
    I’ve saved 130K and I’m ready to purchase my first IP.

    My chosen strategy is land for capital growth, so generally older home, and plan to rent out immediately, as I want to use equity in the first IP to secure the next IP.
    • While I have considerable savings, I don’t want to stretch myself too far so I can still live life a little (Budget Min 350 - Max 500K).
    • I live in Adelaide but will be renting where I want to live (for lifestyle and convenience) so I’m not opposed to investing outside the Adelaide bubble.
    • Happy to buy cheaper older home and add value via renovating if it’s going to be worth it.
    • Preference to be positive cash flow so I don’t need to ‘worry’ too much.
    • 650m2 minimum.
    • Targeting a rental yield of about 5%
    • Vacancy rates around 1% would be nice
    Can anyone suggest suburbs in Adelaide to look into? I’ve been trying to keep to about a 12km radius of the CBD so Valley View, Ingle Farm, Gilles Plains etc.

    Otherwise if not Adelaide, I was looking into Mildura. Can pick up a 4 bed, 2 bath, 2 garage on 800m2 block, fairly new for around $360K, rental median around $380. I know CG will be slower there but is this really a bad idea for first IP?

    And then there is Brisbane as it’s been tipped for growth. But I have no idea how to search for suburbs there.

    Can anyone give advice on simple tactics for identifying prime suburbs for growth in say a city like Brisbane? What are some of the things you look out for?

    If anyone has any suburb suggestions that are out of flood zone for Brisbane and in my price range, let me know :)

    Thank you heaps! Super excited to start this journey. Been reading this forum for about a year and have learnt so much! Thanks again.
     
  2. Spiralkut

    Spiralkut Well-Known Member

    Joined:
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    Location:
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    Honestly I didn't even read it all but going by your title the answer is Brisbane. You want around the suburb of Petrie but anywhere in the Moreton bay area is good. I saw you mentioned Mildura, I own 2 IP there and it's pretty decent but the answer is still Brisbane. In fact you could mention anywhere in Australia my answer would still be Brisbane
    Good luck!
     
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  3. Blaz1ingGooch

    Blaz1ingGooch Member

    Joined:
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    Posts:
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    Location:
    Adelaide
    Thanks for that mate, appreciate it. I am wanting to understand how I can identify areas like Petrie myself, so I don't need to rely on others to tip me off? Any tips?

    Also, why Petrie? It is quite far from Bris CBD (25KM) but I note it has train. And why not Mildura? I am really keen to learn and understand the mechanics. I can guess why not Mildura (due to slower capital growth).

    How have your two IPs been doing in Mildura? Cheers.
     
  4. Blaz1ingGooch

    Blaz1ingGooch Member

    Joined:
    20th May, 2019
    Posts:
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    Location:
    Adelaide
    So I did some research on data Petrie vs Mildura for example. Mildura looks very attractive, can anyone tell me what I am missing? Or is it simply the perception that Brisbane will boom?

    Petrie (Brisbane)
    Population - 9000
    Dist. CBD - 24km
    Transport - Bus & Train
    Median Sale Price - $443K
    Median Rent - $395
    Median Rental Yield - 4.6%
    Vacancy Rate (June 2020) - 1.5%
    Average Annual Growth (Last 10 Years) - 1.42%
    Quarterly Growth (Last 3 Months) - -0.06%
    12 Month Growth (Last 12 Months) - -1.30%
    Cash Flow Score (CoreLogic) - 52
    Capital Growth Score (CoreLogic) - 43
    Lower Risk Score (CoreLogic) - 65
    Occupancy (Renters) - 26.1%
    Market Demand (Visits Per Property) - High (729)

    Mildura
    Population - 33K
    Dist. CBD - N/A
    Transport - N/A
    Median Sale Price - $310K
    Median Rent - $340
    Median Rental Yield - 5.7%
    Vacancy Rate (June 2020) - 0.6%
    Average Annual Growth (Last 10 Years) - 4.31%
    Quarterly Growth (Last 3 Months) - 1.64%
    12 Month Growth (Last 12 Months) - 6.16%
    Cash Flow Score (CoreLogic) - 78
    Capital Growth Score (CoreLogic) - 48
    Lower Risk Score (CoreLogic) - 56
    Occupancy (Renters) - 36.7%
    Market Demand (Visits Per Property) - Average (370)
     
  5. Spiralkut

    Spiralkut Well-Known Member

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    Location:
    Melbourne
    The infrastructure going into that immediate area is huge. Also there are a ton of developers buying and developing there right now which is going to further inflate the prices once their projects are complete and sold.
    Don't get me wrong Mildura is decent if you buy correctly however you can't look at Mildura as a whole. The real estate market there is really split into 4 sections of the city and then you have to identify exact certain areas and streets to buy in there or you will end up with 0 CG.
     
  6. D.T.

    D.T. Specialist Property Manager Business Member

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    Location:
    Adelaide and Gold Coast
    These areas rent really well and typically have no vacancy time at all. They also match most of your dot points so seems you've done your homework.
     
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  7. Spiralkut

    Spiralkut Well-Known Member

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    If you just go research The Mill in Moreton bay that's what I'm talking about
     
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  8. 27649

    27649 Well-Known Member

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    Location:
    Rockhampton
    Hey mate,

    All the best with your property investing journey. If I could add a small tip or critique to your strategy. Just be mindful not to sacrifice location in exchange for land content. Many investors make the mistake of chasing land content which often requires going further and further away from desirable areas in most cases towards where the affordable housing is particularly in the capital cities. Plus townhouses are going to be the preferred dwelling of choice as people are trading space for place. Also we have a baby boomer population that will be retiring this decade and this dwelling type is perfect for downsizing baby boomers. With your budget you could easily get a nice townhouse within the inner-middle ring suburbs of Brisbane close to the CBD and lifestyle amenities. This type of investment is likely to perform better then the mum and dad affordable housing suburb.
     
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  9. Blaz1ingGooch

    Blaz1ingGooch Member

    Joined:
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    Location:
    Adelaide
    It just worries me that all this hype might already be priced in within that area. And if my goal is to have equity to purchase IP 2, then is the longer term play of the Moreton Bay Region a good idea? Seems like more of a 15-20 year play.

    In any case, do you mind sharing the details you mention on Mildura with me? I'd love to look into it some more.

    Thank you Troy, it's always good to consider multiple perspectives. I'd rather do that then get locked into one only. I am however trying to balance land content with location, as we all know the most value is in the land. Are you able to recommend any affordable suburbs in the 10-12KM radius of Brisbane which are affordable, and I might be able to pick up a 600sqm block with a decent home on it? I am guessing the North is better than South (for flooding?) I've had a quick look at the likes of Aspley, Fitzgibbon, Boondall, Banyo, but yet to do a deeper analysis.
     
  10. Blaz1ingGooch

    Blaz1ingGooch Member

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    Location:
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    Also a broader question: where would I be able to go to find suburb year on year growth? Most sites only offer 10 year average, quarterly and last 12 month figures. I'd love to see year on year growth performance charted. Cheers.
     
  11. Spiralkut

    Spiralkut Well-Known Member

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    Location:
    Melbourne
    Domain
     
  12. 27649

    27649 Well-Known Member

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    Location:
    Rockhampton
    Hey Mate,

    You could find a freehold Torrens title townhouse in Brisbane that could give you that land appreciation. In terms of suburbs as Brisbane is starting to densify around the inner-middle rings prices for house and land content is pretty steep however the Brisbane Bayside or the coastline is becoming very desirable for downsizers (naturally people gravitate towards the ocean) Carina, Cannon Hill, Murrarie is certainly within budget, it’s still close to the CDB and gateway motorway which provides access North. A lot of the major infrastructure projects and new jobs are being created near the airport. What’s also happening there is many older properties which are past their used by dates are getting renovated or knocked down and rebuilt so it would be good to have a nice IP near this activity as people are adding value around you.
     
  13. 27649

    27649 Well-Known Member

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    Location:
    Rockhampton
    Nundah is going crazy at the moment because it’s close to good school catchments, so a lot of the buyers that are priced out of Nundah are turning to Banyo, Nudgee area. I’d certainly be looking deeper in Banyo.