Investment Advice (Melb vs Bris)

Discussion in 'Investment Strategy' started by mytwocents, 19th Oct, 2021.

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  1. mytwocents

    mytwocents Well-Known Member

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    My brain is going through a cluster ^$&% with all this movement going on within Australian house pricing as a person looking to invest.

    Would anyone give me a helping hand with investment...

    I'm basically looking to purchase my second property that will see CG to follow on with another purchase further on but continue to gain stable cash flow as a rental.
    Not sure if buying an IP for tax purposes outweighs

    Option 1 - Melbourne

    Melbourne Established Apartment - Built 2015. St Kilda Area. 525K - 450pw rent. (2bed, 2 bath, 2car)

    Melbourne New House & Land - Mickleham Area. 550K - 415pw rent (3bed, 2 bath, 2car)

    Melbourne Established Apartment Ground Floor Massive Courtyard - Windsor. 740K - 620pw rent. (2bed, 1bath, 2car) **this one looks like it will gain good capital

    Option 2 - Brisbane

    Brisbane House & Land - Park Ridge. 550K - 425pw rent. (3bed, 2 bath, 2car)

    Brisbane Established Apartment - New Farm - 600K - 430pw rent (2bed, 1 bath, 2 car)



    I know a lot of options but any advice would help.... really stuck for choice and pathway.
    Please no more comments about olympics in Brisbane.

    Thanks in advance...
     
  2. Parakeet10

    Parakeet10 New Member

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    I'm in a similar situation. It's boiled down to the following:
    Do you want to live in it or have it as an investment only?
    Live in it - go for value and location.
    Investment - go for return. If the IP gives you a breakeven or positive cash flow - fantastic. Otherwise work out when you breakeven and can you afford to fill in the gap until then taking into account tax benefits. CG you will get so long as govt printers keep going brrr.
    I dont know your deposit value, but if you can get 50% down on any of them, you should be fine even with 9% vacancy. With the change to working from home, you may want to consider size of apartments & NBN readiness in older areas and new communities.

    just my 2cents
     
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  3. The Y-man

    The Y-man Moderator Staff Member

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    Why not Perth?

    The Y-man
     
  4. The Y-man

    The Y-man Moderator Staff Member

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    With that budget, get an established house not apartment.

    The Y-man
     
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  5. Hari Yellina

    Hari Yellina Well-Known Member

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    Windsor will my option 1

    option 2
     
  6. skater

    skater Well-Known Member

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    Agreed! Land appreciates, building depreciate. If you own the land you have more control.
     
  7. Hari Yellina

    Hari Yellina Well-Known Member

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    good location, close to CBD, close to water, good private and state schools.

    500 sqm in some parts of Melbourne can buy 10,000 HA of land in the middle of no where,

    It's not the size, Where it's located.

    Quality, Investment grades assets are the way to go. It will grow consistently, in rent and capital growth,
     
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  8. Hari Yellina

    Hari Yellina Well-Known Member

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    lol......

    I am not going to mention the above.

    But after Sydney Olympics, Comm games in Melb and Gold coast, Melbourne outperformed.

    Wealthy ex-pats are returning home close to 500,000.

    In the next 5 years, 1 million high paid jobs are being created. mostly with University level of education or high tech job.

    Most of them are likely to end up in a couple of cities. same as before, nothing changed.
     
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  9. Squirrell

    Squirrell Well-Known Member

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    Interested to guage thoughts. Is anyone concerned re impact of climate change on liveability in seq? Will brissy get too hot? Coastal erosion, more cyclones, flooding, higher insurance costs etc will beaches on gc end up looking ugly with massive rockwalls. Like, has byron bay beach recovered from last dec? Is the threat real or hyped? If it really is that bad, Melb seems better placed being more temperate etc.
     
    Last edited: 24th Oct, 2021
  10. Hari Yellina

    Hari Yellina Well-Known Member

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    Insurance will be an issue in a few years time. Some of the flood zones in Queensland and Brisbane most insurances stop covering.

    House can buy bigger Air Conditioners. Out door worker will impact.

    Technology companies need a lot of Air Conditioners to keep the data stored in a cool place.

    High-temperature places will not be cost-effective for them.
     
  11. Hari Yellina

    Hari Yellina Well-Known Member

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    1) How many ASX 300 companies are based in Brisbane? (I know a company called Virgin, its bankrupt now).
    2) How many high tech companies are based in Brisbane?

    For example take Sydney, one Suburb Surrey Hills. How many new technology companies are opened in the last 10 years. All of them are billion-dollar companies. employing loads of high-income people. The same suburb has 3 big universities as well.

    Brisbane will be a good place for a lot of reasons. But not for high paying and future jobs.

    Some cities won't attract new tech companies and will lag behind.
     
  12. Hari Yellina

    Hari Yellina Well-Known Member

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    Three universities that are within an easy tram or bus ride from Surry Hills are University of Technology, University of NSW and University of Sydney.

    Of these three, UTS is the standout in terms of support for entrepreneurs thanks to its specialist start-up program, which currently has 350 active start-ups.

    The Tech Central development at Central Station, adjacent to Surry Hills, will have about 200,000 square metres of space for tech start-ups, and they will be able to access rent subsidies offered by the NSW government.

    Atlassian founders Mike Cannon-Brookes and Scott Farquhar, who have agreed to make Atlassian the anchor tenant of the Tech Central development at Sydney’s central station, are cornerstone investors in many emerging start-ups in Surry Hills.

    Tech companies based in Surry Hills include Afterpay, Audinate, Canva, Campaign Monitor, Deputy, DesignCrowd, GROW Super, Hivery, Immutable, Morse Micro, Propeller, Rokt and SafetyCulture.

    Venture capital fund managers based in Surry Hills include Grok Ventures, King River Capital, Blackbird Ventures, Square Peg and Airtree Ventures.

    Companies nearby are Prospa, Sendle, Secure Code Warrior and Hipages.
     

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  13. Hari Yellina

    Hari Yellina Well-Known Member

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    Similar Stories with Melbourne;

    High Quality, High Tech, Investment-grade companies will come to Sydney and Melbourne.

    Brisbane and Darwin will attract second-rate companies with cashout and handouts. they will go broke anyway.

    Secondary cities do have some great parks and beaches, in the end. beaches and parks alone won't cut into the future world.
     
  14. Squirrell

    Squirrell Well-Known Member

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    But there will be a lot more wfh in the future than pre covid, how much is unclear. So the relative attractiveness of these places will rise to some degree and they are coming from a lower base. Who knows, i hope you are right as i want to sell my ppor in melb when retired and buy a decent place in sunshine coast for half the price. Im concerned this wont be possible in 10 years.
     
  15. Hari Yellina

    Hari Yellina Well-Known Member

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    Lifestyle options are very attractive in Gold Coast.

    As an investor, we need good rents and capital growth. So, I look to the economics of great companies with high paying jobs provided.

    Some retirees want to stay closer to the good hospitals and close to the grandkids and just love where they grew up.

    There are a lot of cheap houses in QLD NSW, where you can buy them for under $50,000 - $150,000.

    5 of Australia's Cheapest Houses For $50k and Under - realestate.com.au
     
  16. HonestShiba

    HonestShiba Well-Known Member

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    You're completely right Hari, but tech companies are also the most progressive in terms of working conditions. Look at what's happening in Silicon Valley, many are letting their staff work remotely indefinitely. They know talent knows no borders, and will do what it takes to attract and retain top talent.

    Many of the companies you listed are already doing the same and allowing staff to work fully remote. Atlassian only requiring employees to go into their nearest office 4 times and year and Canva only 8 times a year.

    This means a massive amount of high paying high skilled jobs has opened up to Brisbane that was previously unavailable. Plus, we all know how much young people value lifestyle over everything else
     
  17. LP7

    LP7 Well-Known Member

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    If Sydney having a bunch of tech companies operating in and around it's CBD is the most compelling reason to invest in Melbourne over Brisbane, it's pretty good evidence that Brisbane is the choice.
     
  18. beesy7

    beesy7 Well-Known Member

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    Melbourne sentiment is at a all time low

    Affordability is weak and rental yields at around 2 to 3 percent in most suburbs

    Regional areas like Geelong and Ballarat is where the young family’s are moving, I’d say allot of there parents will downsize and won’t be far behind.
    Then you’ve got internal migration from the work from home mob.

    Come back to this thread In a year or two and I think you’ll find many Melbourne suburbs will be flat lining in terms of growth, if it wasn’t for the interest rates I’m sure it would be negative.

    Brisbane hands down for investment , although with rapid growth I’d be treading carefully and looking closely at the data of the suburbs.

    This house rented recently for $380 a week , try finding a house like this in Moreton bay or Logan for under 550 a week rent !
    https://www.realestate.com.au/property//266-black-forest-rd-wyndham-vale-vic-3024
     
  19. sash

    sash Well-Known Member

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    That is telling you something.....be careful of jumping the bandwagon.

    Rentals in Geelong ...Ballarat... Gippsland... etc are crazy.... Melbourne rents are super cheap comparatively. Remember Melbourne has a huge jobs based second only to Sydney.

    Lots of people are are moving to Brisbane... prices are booming.... the question is whether there are enough jobs. If there are aren't we should see a massive move back to Melbourne.... I feel this is going to happen.

    For the record in own a lot in Melbourne, Geelong and Brisbane.
     
  20. beesy7

    beesy7 Well-Known Member

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    I actually live in Werribee and use to have a house in Belmont Geelong , I actually prefer living in the nicer parts of Werribee.

    With the rapid price increases of regional some of the nicer parts of the western suburbs are starting to look decent.
    So no doubt the affordable pockets still have value to the astute and long term investor

    Incomes are much higher in Melbourne so I agree
    We are living threw strange times , so if your buying long term your theory makes sense.

    I prefer Moreton bay over Logan for that reason.
    Income levels and I see more internal migration to these parts
     
    Last edited: 24th Oct, 2021