QLD Greater Brisbane suburbs under 300K

Discussion in 'Where to Buy' started by adam90, 12th Feb, 2018.

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  1. adam90

    adam90 Member

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    Hi
    I'm looking at purchasing my first investment property in greater Brisbane. Ive made the decision to purchase in the next few months, and have a maximum budget of 300K. I rent close to the CBD for work, and am not planning on living in the house in the future.

    My budget includes stamp duty and all fees so that rules out anywhere in BCC. Im also looking to buy as close to the CBD as possible. At the moment I have my eyes on Gailes. Most of the suburb is under 20km from the CBD, and its median for 3 bedroom houses is 250K.

    A few of the houses for sale in the suburb appear to be ex housing commission houses, and the suburb as a whole has a lower amount of social housing then suburbs of similar price (Goodna, riverview, dinmore ect). It's also on the train line and has quick access to ipswich motorway.

    Ideally I'd like the property to be around neutral cashflow, and have the potential for capital growth within the next 5 or so years. I realise there's a lot of vacant land around the area, but Im finding it hard to ignore the cheap price and distance to the city. A small portion of the suburb floods, but houses not in the flood zones are still priced roughly the same.

    Is this a good or bad idea? Thanks
     
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    The obvious question, when I see a limiting options outcome plan is........

    the 300k inc costs budget - self imposed or "real"


    ta
    rolf
     
  3. Sackie

    Sackie Well-Known Member

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    I personally wouldn't buy anywhere which has a large supply of land.

    Unless your budget is strictly being dictated by your current income/serviceability, I personally would strongly consider buying closer to the CBD for quickest chance of CG.
     
    Last edited: 13th Feb, 2018
  4. Heinz57

    Heinz57 Well-Known Member

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    The ex houso places in Gailes are usually well built
     
  5. eletronic_exp0430

    eletronic_exp0430 Well-Known Member

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    I bought a place in Crestmead 3/1/1 about 12 months ago for $280k not including duties. It was a nice house with good value add in the future. Tenants been there for 10+ years and I get rental $340 per week. (Over 6.2% gross yeild).

    680sqm flat block. The garage was transformed into another living space and in the future I can re-add the garage for not much money. Backyard had a brand new color bond pergola and new landscape. Depreciation on it is over $6k per year for the first several years. Just on this alone is worth it for me over the first 5 years. Already close to $40k in depreciation ALONE!!!

    So now I dont put a single cent into holding this and the tenants have redone the garden and repainted the inside for me also. LOL

    I think I got an awesome deal and paid under market as the owners needed the cash to settle on another place they bought in the Gold Coast (they were moving there to retire).

    Online valuations are now showing $320k value. You cant find anything in Crestmead similar to mine for under $310k now. I'm going to take out some equity on this very soon to finance another place in Brisbane (up north this time though).

    You might need to stretch your budget now or find a urgent sale to make the numbers work. Pretty much nothing that I can see worth to buy under $300k unless it needs a crap load of work.
     
    Last edited: 13th Feb, 2018
  6. See Change

    See Change Well-Known Member

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    We've bought in Gailes and of the suburbs in the Goodna area it's our preferred one.

    I don't think you'll find much in the way of free standing houses under 300 k closer to the city.

    You will find the flood prone ones are cheaper . Be wary about anything close to flood zones . We looked at one which was adjacent to a flood zone . While it was strictly NOT in the flood zone , for NRMA it was and insurance was 8 k .. All it takes is a phone call. .....

    I think you'll find that lots of the land around is non develop-able , flood prone , park and anything new on new subdivisions are going to be on a pocket hankerchief and more expensive than the relatively well positioned larger blocks in somewhere like Gailes.

    I posted my reasons for buying out there in this post.

    QLD - Why I bought in Goodna - See Change

    btw , Leo only buys expensive inner city properties which he is obviously capable of paying the significant holding costs without batting an eye lid so thinks every one should be able to do the same ...

    We will get growth earlier in the cycle closer to the city , but in every cycle I've seen close up , % wise I've seen similar percentage growth in crap suburbs like Mt Druitt and often better ,

    Cliff
     
  7. Sackie

    Sackie Well-Known Member

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    @See Change not exactly the case. I always say depends on your income/serviceability and risk profile . But the other areas I'm thinking of have a price point of low to mid 500ks, so not exactly expensive inner city . More like Chermside, Tingalpa, Geebung, Keperra, Arana Hills, Ferny Grove, Stafford Heights.
     
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  8. virhlpool

    virhlpool Well-Known Member

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    When you say $40k depreciation in 6-7 yrs (@$6k per year), it results into total tax saving of no more than $15k-$18k at the very best. However, when you sell the house, this amount adds back to your capital gain for tax purposes though only 50% of capital gain is taxable on IP. So, end of the day it isn’t as big benefit as people claim it to be. It just helps initial cashflow little bit.

    Secondly, I wouldn’t trust online valuation much, nor auto valuation by banks unless you need some equity based on that. What matters is market price and you mentioned that it has increased too, which is a good sign. I have bought or seen houses which had desktop valuation much higher than actual purchase price even at the time of purchase, which could give me/buyer immediate access to some equity (allowing you to borrow more than what your house is actually worth or in other words get loan at much more than 80% LVR) and help the buyer financially but will I be too happy about it? Probably not, as the market price is still the same at which they were purchased. So, all what matters is how much it will sell for in the market today. Just my 2c.
     
    Last edited: 13th Feb, 2018
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  9. eletronic_exp0430

    eletronic_exp0430 Well-Known Member

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    You don't know my entire financial situation and how much money I make. When you have over 20 properties depreciation makes a huge difference to my tax refund every year. When you pay massive amounts of tax it helps. Last year I got over $50k in tax return from the ATO.

    Your telling me this? LOL - I know this very well. I'm not exactly a new or amateur investor.

    I know not to trust online vals. But seeing the average of the suburb move is a good indication.
     
  10. eletronic_exp0430

    eletronic_exp0430 Well-Known Member

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    I agree 10000%. ALOT of ppl on here always and ONLY invest in suburbs very close to the CBD. That is 1 strategy and can pay off extremely well. I myself also have alot of these investments.

    However, I have made the most capital gain in my Western Sydney homes compared to my investments I have in say St Ives in Sydney.

    The cheaper housing has allowed me to grow my portfolio immensely. You cant buy 20 x 2 million houses. It just doesn't work and you will fail serviceability after 1 house.

    Holding costs of houses with low yields also eats bigtime into your profits so that is another consideration. Putting 1000s of dollars of your own money each month into holding a house may not be such a good strategy.

    Many strategies to go buy that will work but I have done extremely well with my strategy of buying in both cheaper suburbs and more expensive suburbs and middle class suburbs. There needs to be a balance.

    I know investors that have made millions on many different strategies and one of the biggest investors I know that is worth over 10 million now invests only purely in outer ring suburbs.

    People saying there is no money to be made in outer suburbs are very naive. Without my outer ring suburbs I would be down over 2 million in capital growth.
     
    Last edited: 13th Feb, 2018
  11. jins13

    jins13 Well-Known Member

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    Agree with this because I've invested in areas which were seem to be undesirable once upon a time but not anymore. I know my mentor has done extremely well with suburbs such as Prospect, Blacktown, Mt Druitt and etc which he bought those properties when they were around $200k each when they were undesirable.

    But in saying that I do have a friend who did bought in Glebe and Redfern (early in the cycle) and have done extremely well too.
     
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  12. See Change

    See Change Well-Known Member

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    Expensive inner city suburbs compared with Gailes :cool::p

    According to REA.com

    Gailes , as an average purchase , you can buy for 259 and get a rent of around 300 .

    Chermside as an average purchase costs you 587 for rent of 400 ..... How many people could afford to hold ten of those ....

    So you can buy two in Gailes for the price of one in Chermside and get 50 % more rent . Is my maths correct ??

    I work on my personal observation that properties roughly double from their previous peak

    Chermside ; current average of 587 is 32 % above it's previous peak of 467

    Gailes : current average 259 which is below previous peak of 269

    So percentage wise that suggests that Gailes has more capital growth left in the current cycle

    So in Summary , Gailes vs Chermside , Better return - Gailes , future growth - Gailes ...

    It's a no brainer for me .

    Cliff
     
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  13. ashish1137

    ashish1137 Well-Known Member

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    Dint you opposed the idea when i told u that i have small blocks in regional victoria. :)


    Regards
     
  14. eletronic_exp0430

    eletronic_exp0430 Well-Known Member

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    I don't recall but

    1) I never buy small blocks. Min 600sqm.
    2) I never buy regional. NONE of my houses are regional.
     
  15. Sackie

    Sackie Well-Known Member

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    Chermside is only 1 of the suburbs I mentioned. :) How about this one.

    Arana hills
    Distance to CBD: 12.6km
    Price sold: 460k home (median house price 535k). In 2014 median was 439k. Consider Mitchelton is only 2.4km closer to the CBD with a median price of 631k!
    142 Patricks Road, Arana Hills, Qld 4054 - Property Details
    Land: 607sqm
    Add value potential: yes

    Demand:
    Arana Hills.JPG


    Gailes:
    Distance to CBD: 24.2km (almost double the distance to the CBD) This is a huge factor for me. I don't see Brisbane and Sydney performing the same in terms of distance from the CBD percentages being the similar. While many outer suburbs in Sydney performed well or even better than some closer to the CBD ones, i really don't think Brisbane and Syd are comparable. Don't have hard evidence (impossible really). just my take.
    Price sold: (median) 260k
    Land: Can get 600sqm plus no worries
    Add value potential: yes but probably to a lesser extent due to the distance from CBD.


    Demand: Also strong but not nearly as strong demand as Arana Hills.
    Gailes.JPG


    I know where I would buy IF it meets my serviceability. I am not saying to not buy in Gailes. What I am saying is if you have a wide range of options due to finances then its worth while considering closer to the CBD. Why closer to the CBD? Well this is my personal preference and belief that Brisbane will ultimately have better growth with dwellings closer to the CBD than further out. I have never believed that 1 strategy suits everyone and investing is highly individualised based on risk tolerance, income/serviceability, skills and your own take on the markets.

    I have actually even posted a link to your Goodna thread to someone in the past who was looking there. I have no issues with people looking further from the CBD. or at any price points. But often they don't know the whole picture and just jump in a lower price point (when they absolutely don't have to) because they think less cost =s less risk. Not always the case imo. many people did similar pre-Sydney boom. They aint happy campers now.

    Ultimately no one has a crystal ball. :)

    This was a fun discussion :cool:
     
    Last edited: 13th Feb, 2018
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  16. adam90

    adam90 Member

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    Unfortunately 300K is my maximum. Due to personal circumstances it will take me a long time to save up any more of a deposit. And while I could be saving, the prices could still be going up. According to realestate.com.au last year for 3bed houses in Gailes they saw 3.3% growth ($8250). And for all houses they saw 4.4% ($11400). Even if there is no growth, I could still find a neutral cash flow property and be increasing my equity by around $1300 per month.

    I also didn't even think to check the demand of the suburb, but glad to see it's above queenslands average (if I choose to buy)​
     
  17. adam90

    adam90 Member

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    Thanks for that info Cliff. Do you think the downward trend in prices after 2010 was due to the floods? If so, I wonder why 2012 was 20K less again
     
  18. Sackie

    Sackie Well-Known Member

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    Then you'll have to choose carefully within your budget. If you can get something with add value potential even better. :)
     
  19. See Change

    See Change Well-Known Member

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    We have houses in Nagel and Ashworth and looked at one in Janice including one that was a total disaster .. Private rental at a way over market rental that was giving a false impression of the market rent . Lots of dodgy work . flexible washing machine like hose on plumbing under the house, showers leaking just as a start I'm no building inspector .

    That actually looks good value for a brick house . If it was a genuine two separate living areas it's a bargain , but the pictures don't really show that and there's no plan so I'd wonder if they're classifying the eat in area in the kitchen as a separate living area . From the outside picture it' looks like a stock standard three bedroom lay out . If I was looking at the moment I'd be very interested on that one . No fuss back yard , gentle slope , concrete driveway . A neat looking rental package

    My recollection is that's well away from the flood areas .

    As previously mentioned , the houso properties have actually been put together well and have been maintained as well.... , usually more so that some of the private builds .

    Cliff
     
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  20. adam90

    adam90 Member

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    Yes that one is well away. Looking at the flood maps it appears a very small number of houses in Gailes actually flood, mainly the 6 houses between Knoblanche Park and Fred Ferguson Park (they should've just joined the two parks together)