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QLD Kangaroo point apartment

Discussion in 'Where to Buy' started by hash_investor, 26th Feb, 2016.

  1. hash_investor

    hash_investor Well-Known Member

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    Hi guys, I am currently helping a friend buy a positive cash flow property for his mother. The lady has some spare cash sitting which she wants to invest in the property. Capital growth is not their interest they are looking for income. I told them about city apartments that rent for $500 p/w. They are sometime cheap because of low capital growth but they rent just fine. I showed them this in Kangaroo point

    31/45 Wharf St Kangaroo Point Qld 4169 - Unit for Sale #121762810 - realestate.com.au

    The interest on this one would be somewhere like 900 +/- and income after all expenses would be around 1500-1700 depending on the rent. What is your opinion about this sort of cash flow positive properties especially kangaroo point or other Brisbane city apartments.

    Melbourne is also an option.

    Cheers,
     
  2. Ember

    Ember Well-Known Member

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    Be careful. Second bedroom is not a proper room as has no external windows or ventilation. Might even be illegal to rent it as a bedroom, more like a study. Body corporate is $100 per week. Not for me.
     
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  3. Heinz57

    Heinz57 Well-Known Member

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    I thought this block was more of a hotel room arrangement, didn't realise they could be lived in.

    Actually $100 / week isn't too bad for a place with a lift in K.P.

    As a KP local, not for me either.
     
  4. hash_investor

    hash_investor Well-Known Member

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    Hows KP going as a rental place. Is it easy to rent this place ??
     
  5. Heinz57

    Heinz57 Well-Known Member

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    I think rental vacancies are increasing.

    57 m size does make this more of a hotel room than a home. Assume it is being sold furnished. There is demand for hotel rooms in Kangaroo Point due to proximity to Gabba, city, hospitals etc.
     
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  6. hammer

    hammer Well-Known Member

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    Have you driven around Brisbane lately and seen the 3 billion or so new apartment buildings going up?

    Once they are finished, what do you think will happen to the vacancy rate and price of your KP apartment?

    Read about what is happening in Melbourne before pulling the trigger on this. There is a very good chance that Brisbane is heading down the same path.
     
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  7. hash_investor

    hash_investor Well-Known Member

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    Can you share some links about Melbourne market to elaborate whats happening there? I know city apartments are not appreciating due to excess stock but as I said we are not looking for capital growth. As long as they can rent the apartment we are good. Are vacancy rates sky rocketing?
     
  8. Heinz57

    Heinz57 Well-Known Member

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    Don't know about melbourne rents

    rental vacancy not skyrocketing in CBD / KP yet but increasing. The other issue you may have is if you need to sell this in a hurry. Still a niche product I would think for Brisbane.
     
  9. hammer

    hammer Well-Known Member

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    Here's a few links.... This one is written by a property spruiker...he should be all for this stuff but he isn't....
    WARNING: Don’t buy this type of property… Ever!
    And a down to earth one by Scott pape
    An open letter to the young people of Australia - Barefoot Investor

    May is suggest though... that if you're unaware of this stuff, you are in no position to be advising someone.

    Sit down, grab a cuppa and read this forum for about 3 months before doing anything.
     
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  10. Bran

    Bran Well-Known Member

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    You are giving advice and suggest an inner city apartment? If they don't care about their capital, give me the 360k, I'll give them 500 a week, and 260k back in a couple of years time. Oh, and then there is this .

    Screen Shot 2016-02-27 at 1.53.18 pm.png .

    Add 50,000 units to this vacancy rate.


    Edit: Oh, and body corp is 91/week. Say 450/week rent, thats 360/week after BC. Thats 5% yield. Plus management expenses etc. Doesn't sound like it's going to be positive.
     
    Last edited: 27th Feb, 2016
  11. Azazel

    Azazel Well-Known Member

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    Yeah, lots of competition trying to get tenants.
    Owners dropping rents and offering incentives.
     
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  12. TaylorChang

    TaylorChang Well-Known Member

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    From the lending prospective, you need to make sure if that second bedroom is really a "second" bedroom. As the valuer comes in for inspection, it's more likely to be classified as a "study room" or "storage room" in the valuation report. Then your loan amount may not be approved as you wish it would be. Double check the contract and talk to your broker about the valuation risk on this property.
     
  13. Heinz57

    Heinz57 Well-Known Member

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    Those furnished places did OK during the mining expansion according to my building manager. Perfect for fly in fly out or corporate let. Not attractive to long term tenants.

    Might be time to cash in my place and take advantage of the rental oversupply.
     
  14. Casteller

    Casteller Well-Known Member

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    I actually lived in that exact building in Wharf street 14 years ago for 6 months while on a contract in Brisbane. They are not conventional apartments, small and open plan, yes like hotel rooms. One was for sale a 2 br place for 200K or something I had a look but it was a joke both bedrooms were exposed to the general living area. I didn't like living there, left after 6 months and went back overseas to work.

    57m2 is quite good really for a 2 br apartment or a huge 1br. Everything I have lived in in the last 20 years has been under 45m2 (except a holiday place I bought). Current 2 br place is about 45m2, heaps big enough. My latest IP is 39 m2 1br and plenty of rental demand for it, my place in London was 42m2.
    The key is outlook/views, if you have those it more than makes up for lack of interior space.
     
  15. jaybean

    jaybean Well-Known Member

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    Yup it's a decent size as long as it is laid out well.
     
  16. radson

    radson Well-Known Member

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  17. Jacob1

    Jacob1 Member

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    Investment properties are ideally purchased for the demographic of the area you are purchasing in. The demographic of Brisbane is in no way accepting of a 57m 2 bedroom apartment, albeit 1 bathroom.

    In Melbourne it would be acceptable.

    If you are looking at more of a return than capital growth sub $400k, I would recommend something in the Gold Coast with short term letting.
     
  18. See Change

    See Change Timing Lord Premium Member

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  19. radson

    radson Well-Known Member

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    Thank you.
     
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  20. Heinz57

    Heinz57 Well-Known Member

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    Shares at 20% discount and an income and franking credits! I know which I would choose out of these 2 options!
     
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