QLD First IP in South Brisbane?

Hi all,

Have been doing some research on and off for the past 6 months on looking for my first IP and looking for some more pointers. Looking to do a buy and hold strategy due to our age, with the intention of buying IP 2 and 3 in the next 5-15 years in Brisbane if all goes well. Aiming for capital gain over rental yield.

Background:
I'm 29 and with my wife bought our first property mid 2015 in which is our PPOR. It's a 2/1/2 apartment in Engadine near a train station which we own ~50% of.
I have a budget up to $600k and looking to buy a house in Brisbane, possibly with the intention of living up there and turning our current property into an IP, but that's at least 12-18 months away if it happens (just to complicate things!).

As mentioned I've done my research (mostly on here) and it seems the Camp Hill/Seven Hills/Carina/Carindale areas seems to have been mentioned (don't think I can afford Coorparoo) I'm not too sure if they have already moved too much, but I have found a few places within budget. Looking for mostly brick/floor boards/modernish kitchen/bathroom due to ease of maintenance, and I'm aware value adding being ideal but worried it could turn ugly/expensive very quickly especially since I'm interstate.

Looking for some advice as I plan to go up and have a look around end of June to get a feel for the areas and look at some places while I'm there. Whilst I have done a bit of research and generally know what to look for I'm aware I don't know everything and open to any pointers anyone has.

Thank you for your help!

 

As Rolf has said, you essentially have two options - do all the work and research yourself or employ a professional who not only knows the areas and economics inside and out, but can do all the work (stomping the ground, negotiating and handling the purchase) for you.

I have done both and while I used to enjoy the work myself, I have generally gotten better results and saved bucket loads of time using a BA for my personal portfolio so for me, it's worth every cent and obviously we believe in it given that's one of our main service offerings.

- Andrew

 

My initial thoughts are to teach myself as much as possible which was the reasoning for me reaching out for some pointers.

However, if a BA can add more value than me teaching myself and help me come within budget, I'm not against the idea.

I had planned on going up to Brisbane anyway to get the ball rolling in either case.

 

Might get something on a 400m block in Carina or Carindale but they would more than likely be dated- but rentable. If you find something sub $600K, with your criteria, in a good position, you would be buying well!

 

I like your marketing style. I don’t know whether I am unlucky guy, finding good BA is finding a needle in a piece of land. I rarely found them competent one, not worth for the amount of money.

 

Being a new member, I thought to give piece of advice. This forum mainly have competent investors and other service providers. You can learn from both here. Some of them drag your direction to gain some personal gain, so you have to protect your self. Some of the comments could be absolute blunder. Before you get convinced, see through history of the person comments- it will give an idea.

 

In over 30 years of buying property I have never considered a BA. W

I am interested in understanding how a BA would do better than yourself? I enjoy every bit of the process, BAs don't have any information that you can't get yourself, and negotiating isn't difficult, just takes practice. Would really like to know how they have saved you money.

 

Unsure why you are concentrating just South of BRI but I do like your choices of the suburbs. I myself hold a house we built in year 2000 in Carina. Just remember a deal can be found if you know what you are looking for....
But please don't buy a unit in BRI, a house with land is my preferred option for never to sell strategy, or if finances cannot afford then townhouses but in very small complexes...
A friend bought in Carina few years back in a complex of 3 with the intention to acquire eventually all if possible or at least another one, owning majority then....
So don't rush, just research first....if you see say 100 properties you will get a much better idea what value it should be. Also, do a cosmetic renovation first rather than a structural... if this is your first IP...so take little steps first and learn!

 

Being able to negotiate doesn't automatically get you a good deal. You need to also find a seller who is negotiable and to do this you need to be in the market constantly making offers on suitable properties. If you live around the corner that's easy but if you live interstate like the OP you have to fork out a fair bit in airfares and accommodation and even then you are really limiting your active time in the market. If having a BA on the ground means that an interstate buyer makes offers on twice as many properties than would be possible otherwise then I'd say it would be quite easy to recoup a $10k BA fee if not more simply by having the time and resources to find the right seller.

Willy

 

True, the recipe does require a bit more than negotiating and time on the ground, but just like REA, BAs are variable. It also sounds like the OP is doing the right thing, getting out and having a look on the ground. Personally, no matter where the property was, I wouldn't trust my purchase to a BA who really is just trying to get a sale themselves- I see it as a conflict of interest, but that is just the way I think, and I don't think it is unreasonable to be very cautious. Home buyer's agents: what you need to know

 

I don't see it as trusting a BA to purchase a property. I'm paying a BA to find deals and present them to me. If I buy the property it's because I can see it's a good deal.

Willy

 

If you don't know the area, and BAs are presenting you deals- how do you know if it is a good deal? How do you know that BAs are only presenting you deals with some type of kickback, or one that they can put together quickly? I have yet to meet anyone who has got a better deal by using a BA. Living and investing in Brisbane, I have seen a lot of BAs giving poor advice to interstate buyers- areas that are cheap for a very good reason with very poor CG. Or advising them that they can buy something close to the CBD for ridiculous prices, to then sell them on a less desirable area when no such property can be found. But I suppose if it gets you into the market, it might be a good thing.

 

You live in Brisbane and invest in Brisbane so it's not surprising that you don't see the value in Brisbane buyers agents.

Willy

 

I don't only invest in Brisbane, I also invest elsewhere- and when I do, I do it myself. It isn't rocket science.

 

Not rocket science but it does take a lot of time that not everyone has.
I'm currently looking at three areas. One is close enough to do myself, the other two I'd need a buyers agent due to time constraints and distance. To start with I was leaning towards the option without the need for a BA to save $10k even though I know the other locations are more suitable. Convenience isn't a good selection criteria and I think it's easy to fall into this trap.

I'd rather not have to use a BA but I can see how they have their place.


Willy

 

Isn't this like any service provider? Of course you can do it yourself. But you must consider time taken to not only perform that service but also learn the trade.

Anyone can perform mechanical maintenance on their car. Doesn't mean everyone 'should'.

 

For a seasoned and well educated investor with a lot of motivation and the appropriate skill set, a BA probably wouldn't be required.

However for the average person who buys and sells only a few properties in their life time (which is most people), a BA is just like any other professional - they are doing it daily and usually have a more honed skill set and knowledge base of all aspects of a purchase which contributes to both a reduction of risk in many different areas, as well as a better financial outcome both on entry to the purchase and to its performance over the long term, compared to what that person could have accomplished themselves. I used to enjoy the process for my own purchases also until I no longer had the time to do it properly.

As a quick example - and this is 100% a true story - a client used a BA to buy her property in Sydney a few years ago. It was on the market for offers over $1.4m with good interest and the BA had dealt with the sales agent quite a few times before. The sales agent was eluding to offers around high $1.3 would get it but based on market knowledge, very recent unpublished comps from acting in the days and weeks leading up, an offer of $1.321m was submitted. It was rejected with a counter of $1.35m which the client was ecstatic about given she had expected to pay more than that.

However the BA knew more and had great negotiating skills....the client wanted to take the $1.35m so as not to lose it, but he convinced her to let him do his job and rejig a few things to counter again at $1.325. That offer was accepted.

Even at $1.35m it was a great buy but the BA's knowledge and skill set saved her an additional $25,000 that she definitely wouldn't have saved had she been going in alone given her reluctance to counter again at $1.325m and just take the $1.35m. The problem with most of these things is that people walk away thinking they've done a great job and got a bargain, and sure, often maybe they have, but of course the benefit is often never known....had it been purchased for $1.35m the $25,000 would still be sitting in the vendor's pocket and no one would have been any wiser.

So yes, people can do the job themselves and maybe do it reasonably well. However it's the unknown quantities that are often unable to be quantified as far as value and saving money goes.

Food for thought.

- Andrew

 

Sounds you are lacking something. So in your eyes interstate buy require BA? I bought last two purchases interstate without BA. Very good deals. When I spoke with one BA he tries to sell some of the craps. I have spoken with two of them, I cannot see value for 2.5-3%. Even if BA present you the property, to convince yourself you need to do your own due diligence checks and ensure it is ok. I cannot still see the value.

To find negotiable deals you don’t need to make an offer, simply chk whether seller reduces the advertised price. Chk in the RP data history. So you can replace BA with $150.

 

Correct, I'm lacking the time necessary to purchase interstate.

And if you think that looking at advertised prices on RP Data is a substitute for active negotiation then I think you should consider using a BA.

Willy