https://www.realestate.com.au/property-unitblock-qld-ashgrove-131702394 I'm trying to evaluate the worst case scenario for a flood prone, but blue chip area. I'm mainly looking for high yielding buy/hold deals to increase my income and that is also something with add-value value potential. In this case it's a renovation. However considering it is in a blue-chip suburb, i'd be happy on riding on market-driven growth since it would be a long-term buy and hold. However the catch is it's in a "Highly Likely 5% Chance" of Annual Flood Category. I'm not really aware what the potential costs associated with flooding and i'm trying to evaluate if the risk of holding onto a flood-prone property with good cashflow outweighs the costs of inevitable flooding. What are likely risks/costs and worst case scenario's that could occur? How much would expenses would tally up? Some scenarios: - What happens to tenants in these scenarios? - Mould damage / repair - Carpet replacement - Re painting What other factors to consider?
I wouldn't do it (that being said, I'm a chicken). Insurance will be through the roof, and the bank may probably treat this as a commercial property, so LVR will be < 80%. People have short memories but if it does flood again.... Plus I'd panic everytime a storm rolls in in summer. What's SANF worth?
I totally agree with @Lacrim . I was a teen and remember well when the 1974 Brisbane floods were on. I was middle-aged when the 2011 Brisbane floods were on again. I hope to still be here enjoying retirement in my old age when the next floods in Brisbane occur (which they will)....
I'm assuming most of the properties from those previous floods are still standing, so it's a matter of tallying up the damage to repair while banking in the cashflow to pay it down. As for insurance according to the description it's $2200 yearly. It probably doesn't include flood but perhaps you could opt-in for flood insurance prior to flood season and opt-out after the season is over.
Floodinformation.brisbane.qld.gov.au Looking at this I'd also be having second thoughts I'm an optimist though, and as the annual chance on comes halfway up the block it's possible the house wont get flooded due to being raised.... I would consider walking the street, find a well kept yard with a garden gnome and go knock on the door (chances are they've lived there a while) and ask how high the waters have ever gotten It could be your best or worst purchase based on this conversation
Apparently we are currently moving into a La Niña weather pattern after a few years of drought so expect wet weather events.
Pretty sure that whole area was smashed in the 2011 floods. Looks like it could be all asbestos as well, so any renos would be costly.
True - it will be wet. I would add it is also going to blow harder, burn hotter and rain more intensely in the future, and history will not be a good way to project the future. With flooding it would pay to think about the increase intensity of storms (local flooding risk will escalate) and flood levels being generally optimistic. So if you are a pessimist, you are probably reading the future realistically.
I remember reading somewhere that what used to be a 20 year flood frequency (5%) is now really a 10 year frequency and likely to drop further. As Clint says "You have to ask yourself one question: Do I feel lucky?".
This risk would be a deal breaker for me. I lived in Ashgrove in 2011. Many of the streets that are flood risk marked in the area weren't actually impacted as much as areas with creeks closer to the river in 2011. The water that caused the big problems resulting in the major flooding in 2011 were a convergence mainly of high tide at the same time as water having to be let off from the dam and making it's way down the river, and the massive downpours that resulted in a torrent becoming a huge waterfall off the Toowoomba range - that water that caused devastation as it made it way towards the coast, also bypassed the Wivenhoe dam and also added to converged at the same time. So the creek systems that were the worst impacted are ones where flooding from river pushed back up into the creeks, and added to already swollen creeks from heavy rain flowing into the river catchments overland as well. Although this spot is closer to Newmarket side - I know that issues with heavy rain combined with king tides are a regular issue in creek areas in Windsor, which is not far away. But it just takes a significant downpour falling in a particular spot and feeding into that creek further upstream, and you get a torrent that the creek can't cope with, and you have a big problem in a spot like this. Before 2011, Ithaca Creek has some significant fast moving flooding as a result of extreme rainfall further upstream - it resulted in a house in 94 Lugg St Bardon being completely swept away. I don't think they ever rebuilt. I may consider something that has 1 in 100 chance of impacting on part of a block if it didn't pose a risk to the house - that is, house and level at which it sits are higher than the levels on the block that have that risk. But 5% risk and covering the whole block would be a big no for me. Looking at that particular map would be an even bigger nope from me. Not worth the risk.
I know this property has sold already but for what it's worth the flooding wouldn't really concern me too much. According to the floodwise property report for the site, the 1% AEP level (i.e. 1 in 100 year flood level) is 11.4m AHD. Based on the contours of the site, it looks like the floor level of the exisitng building are at least 0.5m higher than this so i'd say that it is pretty unlikely that the units themselves will ever flood. Yes, the backyard closest to the creek will flood frequently and the whole site may flood in a very rare flood event but I personally wouldn't be too concerned about this.