hello all, I have a borrowing capacity of $440,000 and I want to build in northern Brisbane somewhere. I have been recommended to build a townhouse in Rothwell promenade. What are your thoughts on investing in: - Rothwell - townhouses versus a house and land What suburb do you suggest to build for an investment in terms growth and yield with a borrowing capacity of $440K
Who made this recommendation to you and what do they get out of it? There are a million new houses going up in Rothwell in tiny blocks of land. No good. Edit: ok I know exactly where you’re talking about now, I know someone who lives there. I would not buy there. No way. The blocks are tiny with massive houses. You are better off going for an established house on a large block.
I’d go for something like this - spend $5k making it more rentable and then hold until the suburb improves and then knock down and subdivide. The older part of D Bay near the water will eventually gentrify. https://www.realestate.com.au/property-house-qld-deception+bay-133805190
Thanks for this. Why do you think established house is better? I was thinking a new build for tax purposes...what are the other considerations?
There aren't any big enough lots near the water of Deception Bay to subdivide. The Urban Neighbourhood zoning requires at least 3 dwellings generally and you can't do duplexes. 600sqm lots or corner lots could be developed due to the zoning. Frontage needs to be >= 13M to really make a development practical (due to turning widths for parking), a corner site a way to get around this for a smaller lot.
Deprecation is good but it’s not everything. It lowers the cost base of the property so when you sell it you have to pay more CGT. And new builds in areas like this don’t normally get good CG. But maybe if you have a very high income and are in the top tax bracket this is the strategy for you? I just don’t think that new builds on small blocks in this suburb will appreciate.
Could not agree with you more. I would also NOT recommend building a townhouse in Rothwell. There are so many other areas that are more established that will provide better overall returns for you. Of course I have no idea WHY you are wanting to invest? Is it for cashflow? Or capital growth? Or both? These questions need to be answered before you start looking at locations and product types. By the way, if you have not heard of the term "Property Spruiker" I recommend that you tune in to this podcast episode. It explains the dangers of taking "advice" from people selling new stock. Ep 11 - Beware Of The Property Spruiker
I’d be waiting a little longer with COVID as I think with that budget you may pick up a good distressed purchase in the better/desirable areas in Moreton Bay, parts of BCC and even Gold Coast. Townhouse would be interesting you might be able to pick up one within a 20km radius of the CBD.
It looks like you're being pushed towards a brand new product by someone who's getting paid big money to secure your deal. Brand new isn't necessarily a bad option, but it's often overpriced and offers a poor return. $440,000 is a fantastic budget for any of the SEQ regionals and can get you a variety of options- e.g. brand new (but well priced), existing in good condition, existing needing renovation, development potential, etc. What are your goals @Browny ?
