First time buyer. Tweed Heads vs Brisbane?

Hi all,

I just joined the forum and made a short 'about me' post in the introduction section.

Just after some opinions. I'm tempted to buy a unit/townhouse in Brisbane from 250-275k price range and make it PPOR as my work and life is based there.

However, what about buying a unit/townhouse in Tweed Heads and trying to use my head instead of heart?

The research I've done seems to say the rental yield in South Western Brisbane around Moorooka to Darra-ish is around 3-4% but Tweed is closer to 5-6%.

Tweed also has had a stronger growth rate with the compound growth rate averaging out at 5% for units in Tweed compared to around 1% in Brisbane in the last 5 years.

I'm young, I'm new so I don't know it all. There has been a lot of talk that Brisbane is going to boom, but I feel like we've been saying this since 2017. What do you all think?

I personally think I'd be better off buying in Tweed, riding the growth wave and renting it out for higher yield than Brisbane. Meanwhile I can rent/live in Brisbane.

Any thoughts or advice? Perhaps Tweed is a higher risk area than Brisbane for investment as its smaller?

 

Hi @Zacareah

How did you distil down to $250k to $275k purchase?

Is that based on your available savings or borrowing or both?

 

All comes down to your goals. Generally speaking I'd choose Brisbane any day of the year over tweeds as having less overall risk.

As an investment I'd stay clear of units/THs.

If it's a PPOR then you can do anything really.

 

Gold Coast had a pretty good run when Sydney and Melbourne did well, so I'd be asking myself the question, has Tweed had its run and is it Brisbane's turn for growth?

If you are happy to rent you could look to invest your 250-275k in a house in Brisbane with the best yield you can find, look for a property you can add value to via a small makeover.

Something like this is ideal, pick it up for a bargain price then do paint and carpet and blinds and rent it out for early 3's? We did that on this one (purchase price was $205,000) and got $320 a week and it's just been bumped up to $330 giving an 8% rental yield. After the makeover it's probably added 70k genuine equity to use for refinancing.

https://www.realestate.com.au/property/77-sunscape-dr-eagleby-qld-4207

 

I've seen numerous lenders, i can borrow roughly 350 but only want to borrow 220 or so. Its based on what i want my life to look like i guess. I dont want all my money to be going into a mortgage, id like to enjoy being young for a few years but be 'responsible' simultaneously by buying a cheap property, of that makes sense.

@Sackie, why would you stay clear of units/THs. And why not Tweed? Tweed has had better growth and rental yield than Brisbane in the last 5 years. Unless there is something I'm missing, Tweed seems like a better investment. I'd actually much prefer to Owner occupy in Brisbane but im trying to consider options. I understand units and TH do not have as much potential for growth as a house but houses are a significantly bigger commitment and significantly more money to buy. Im young and single, thats why I'd consider a TH/Unit to rent out.

 

Yeah thats the sort of logic im debating in my head. I do think Brisbane will go up and I wonder if tweed has already had its turn.
Thanks for the reply

Also, ive been looking at places south of the River. Would you suggest better investments to be had on the northside? I. E. To rent out.

 

The big debate, Southside or Northside..? Southside seems to get the better yields and I think a better chance to pick up a great deal. For me Southside wins.

 

Land goes up in value, not the building which is why generally houses perform better. Also units begin to have an oversupply so as they age you may have trouble finding a tenant and will have to drop rents to find tenants as your old unit is now competing with newer flashier builds.

Also you have to pay strata on units and townhouses. Not an expert, maybe someone can explain better but that's my general take on it. As an investment (and your first) it's most important to get it right.

 

That said, plenty of options around australia in your price point. Look into ipswhich, goodna, logan.

 

Another viewpoint. Build up a good block of assets in your 20s, and your 30s, 40s, etc become easier.

You think there will be more money later? Most people at 30? Struggling for a deposit for a home. Kids just makes it financially harder.

40? Struggling to upgrade because the house in the nice high school catchment is expensive.

Your life, though.

 

Can you buy anything for $250k in tweed heads? Can you wait till you can borrow more money? I think there is potential if you choose right product in tweed. It’s sandwiched between expensive Byron and Southern GC.

Everyone has been telling people to buy in Brisbane for last 5 years with no exciting growth happening so I guess you will have to get some growth in Brisbane eventually but again not sure about your price point. While everyone was saying buy in Brisbane the Gold Coast has and still is having some exciting growth I went to see property on weekend with 50 plus people there. Again it’s suburb specific so you need to know your market.

 

I would forget about Brisbane and buy something on the Gold Coast. You will get much better growth and yield here than Brissie, especially south Brissie which has a low socio economic demographic. On the GC you need to pick a walk up block with low body corp, east side of the GC Highway somewhere between Surfers and Tugun. Find something you can add value to like a bathroom/kitchen renovation. GC will see good gains this year, it's hot and everyone wants a piece of it.

 

You would be better off buying something between $300K and $350K if looking for a unit, 2 bed 2 bath as a minimum will do better than a 2 bed 1 bath or 1 bed 1 bath. Not sure if you would get aTH on GC or Tweed for that money (in a decent area)
Otherwise I would personally wait until earning more income, invest the savings somewhere to make a better return than just a savings account or term deposit - live your life in the meantime. Reading your posts I'm getting the impression you want to do other things than "just" buy property at this stage, which is fine, don't get sucked into buying a dud property just to "be in the market"

 

Yes I cant believe how hot it is on GC at moment both property wise and climate wise . I always want to move to Tasmania this time of year .. As you said the benefit of GC is you get growth and good yield.This should flow to tweed but I dont think there are any properties that are decent under 300k.

 

There are many reasons. Generally speaking, Brisbane has much stronger long term demand than Tweed heads. And why I'd stay clear of units? The best performing dwelling type in Brisbane is houses.

There are always exceptions etc etc. But overall I see much lower risk in Brissy medium to long term. But your budget is challenging for me. I have no idea what to do with your budget in terms of what or where to buy.

 

Agree with a lot of others in here, expanding to the 300k-350k range opens a ton of options with good growth throughout brisbane. Many with good yields which make holding a lot easier.