QLD Logan City IP

Hello everyone,

We are in the process of finding our IP in Brisbane and after a lot of reading on this and other forums I'd like to get some feedback from more experienced guys (means you ). We just spent two days driving around the area to get the feel of it (we are Sydney based).

Here are some points:

- budget $350k
- house
- interested in Logan City area
- mid to long term investment

Will be more than happy if anyone can help with choosing the right suburb. Or at least make a few points if I'm right or not.

Suburbs:
Woodridge + Slacks Creek - SC was one of my top suburbs in the list. But not quite sure at the moment. Wasn't very impressed, very depending on street. Might attract bad tenants.

Kingston - liked this one, how's the area particularly around Berrinba East State School? Some houses sitting on big block and still within the budget.

Marsden - looks neat and quiet, a lot of same houses, also on small block. Is there a small capital growth potential?

Edens Landing - liked this one, any comments?

Tanah Merah + Bethania - neutral feeling, but more positive than negative.

Apart from all of those we really liked Daisy Hill, knowing that is over the budget. So the question is - get more funding and invest there or not?

Thanks for any comments.

 

We like the area too for the long term & have IPs in Eagleby.

What specifically are you after with this investment? Capital growth or return? The way we make our choice around which specific property once we're set on an area is fairly simple & comes back to the numbers.

Which of the options are going to provide you the best return on investment? Yield is key to this for cashflow and infrastructure & investment going into the area is key for capital growth as well as the opportunity to add value.

Adding value is hard when you're interstate, but if you're looking at something in a decent sized block then there is opportunity to add value and yield by putting a granny flat onto the block. Logan City council are about to change the rules making this more expensive.

 

A lot of land in Logan. There are markets within markets. Best stick to Logan suburbs which offer transport and shops.

A number of areas which are supposedly "below market value" have high vacancy rates and no uniqueness factor.

 

Here's one almost on budget at Daisy Hill. Needs some work downstairs but might be good value add- 11 Conifer Street, Daisy Hill QLD 4127 | squiiz.com.au

 

For that price range I like Slacks Creek. Furthest North suburb (closest to Brisbane) you will get for your money, established, well connected and (slightly) better reputation than Kingston Woodrige and Marsden

 

Just be aware that parts of Logan are into their 3rd generation of unemployment, drugs are a problem and personally I see it only getting worse, not better. That said, my father has an IP in Marsden and has had a great renter in it for over 10 years. Anything on the other side of the freeway is a good choice, but it may not be cheap anymore. There are some really big blocks in Kingston that are capable of being turned into town houses, so that might be something to think about. There's a particular street near Kingston station that used to be a no-through road that has some massive blocks on it. I think it's out of your price range though. Personally I'd steer clear of Woodridge. There has to be other places where you can get decent rent and CGs.

 

Been seeing a lot of good deals in Marsden and Crestmead recently. Have even seen a few 4/2/2 brick houses on >600sqm for under $350k, a lot of the stock seems to be newer than Kingston/Slacks Creek aswell.

 

I like to look at demographic data, unemployment rates in particular, as it's a good indication of accessibility to employment, employability of local residents, and whether the locals can make a living there, settle down and eventually bid up prices.

Based on latest Sept 17 data:

• Marsden 9.5% trending down
• Kingston 16.2% was trending down but shot back up in the last 6 months
• Woodridge 19.3% was trending down but shot back up in the last 6 months
• Slacks Creek 10.1% trending down
• Edens Landing 6.2% trending down
• Tanah Merah 4% trending down
• Bethania 6% trending down

Having said that I still like Marsden/Crestmead and surrounds for a good blend of owner occupier appeal and investor appeal. The numbers are still stacking up from an investment perspective (strong yields).

 

My clients outside of QLD always have a similar reaction when they fly up to Logan and drive around.

On google maps, Woodridge, Kingston, Slacks Creek and Logan Central are the go to suburbs due to its central location and proximity to Brisbane CBD. On the ground however, the perception is changed dramatically as these are the most run down, ghetto suburbs in Logan.

Does this translate to less growth though? Short answer is no as we've seen these suburbs can and have achieved as much, if not more growth than suburbs with a "better feel"

I can say that suburbs outside of this area are considered more 'desirable' especially for owner occupiers/first home buyers. That said, all properties regardless of location has its value and money can be made anywhere if the price is right and the numbers stack up.

To expand on some of your findings;

Marsden is actually home to some really large subdividable blocks but the prices certainly reflect this ability nowadays

Edens Landing - keep an eye out for sloping blocks and landslide hazard overlays

Tanah Merah - small suburb with good access to motorway/hyperdome. The prices are too high for my liking especially for the West side of motorway and price disparity between surrounding Bethania, Loganholme, Edens Landing etc.

Not a big fan of Daisy Hill and surrounds simply because, as you say, they are too expensive. For similar money, you can pick up stock way closer into Brisbane. Defies the purpose of buying in Logan in the first place. That said, the fact that these suburbs are sustainable and priced so much higher gives me more confidence that the cheaper parts of Logan will do well in the medium - long term

 

I would decide on what your looking for first, set your budget, minimum yield, dwelling type etc and then be open to purchase within a few suburbs.

You can expect most of these suburbs to gain value at a similar rate, you may make a bigger difference in capital gain during the buying process finding the best deal.
Don’t need to narrow your search down to just one suburb.

I was open to buy in Crestmead, Marsden,, Waterford West and Bethania but the right house came up for me in Waterford West first.

 

Have a look at hillcrest, browns plain and regents park. Nicer areas compared to marsden, Kingston and Woodridge.

Schools, good access to freeways, large shopping centers etc

We bought one there this year for the 360k mark

 

I've got a few investments in Logan. If your looking 5+ years you WILL definitely make money. I like Marsden and Crestmead. Drove around there and they are very quite suburbs mostly family orientated houses and they are newer and nicer builds with > 600 sqm blocks which help alot with depreciation and tax etc....

I've got a house in Crestmead actually the tenant has been in there 15 years when I bought it and its IMMACULATE for its age. And I mean it looks brand spanking new. LOL - he even repainted the house himself and did all the landscaping for free.

The family doesnt want to leave so they have been there since I bought it. Excellent tenants.

Honestly I've said it numerous times there are bad tenants in every area. I've had the worst tenants in the world in my St Ives property in Sydney and thats a 2 million + suburb. I literally wanted to kill them.

Just have a good agent to manage and you wont get any headaches.

When you have places like Daily Hill fetching already 600s or more in sales then that is a very good driver for future gains in surrounding areas.

If you look even now at Crestmead 4/2/2 newish houses you wont get anything less than $370k now. ALOT selling over $400k now. When I first starting looking in the area I saw equivalent houses for alot less.

Look at this. 12 months ago this would be around 375k or less. This will sell I reckon for close to asking or over.

5 Serenity Court Crestmead Qld 4132 - House for Sale #127091270 - realestate.com.au

These older houses are now selling for over $350k. I picked up a 4/2/2 much much newer than the below one for $340k 8 months ago. I'm gonna get it revalued and take out equity once the new year starts. I'm expecting around $375k-$380k for the valuation and thats what numerous online valuations are showing now as well.

19 Stratton Court Crestmead Qld 4132 - House for Sale #127099594 - realestate.com.au

 

Some great points made here so far, particularly by Simon. Morgs also touches on your first and foremost consideration surrounding investment strategy- Logan suits a yield strategy, not capital gain.

- Budget is perfect
- Definitely agree to stick to houses
- Area very suitable for mid-to-long term investment.

Being interstate as well, it’s likely you’ll want a house that’s already in good condition, though this can be a little hard with the budget. Interstate renovations and major repairs can be expensive, though that’s only really compared to DIY owners. A good Property Manager can do a fantastic job of Project Management if buying a fixer-upper ended up being the best option.


Woodridge, Slacks Creek and Kingston: These are all very similar areas and demographics. They are largely a VERY poor demographic with high crime rates and dated amenities (shops, schools, etc, not great). Prices for houses are on the rise and there’s a big trend for building in downstairs at the moment, though a lot of these are being done illegally because they’re not high enough! A shrewd buyer will be able to identify the nicer streets and snatch something up there.
If you buy the right house and can live with the poor demographic, I think this area is going to see strong growth on the back of its location beside the M1, across from Springwood and surrounds, plus directly below Brisbane.

Marsden: Careful here. It’s a large suburb with a very wide variety of quality in the housing and tenants. There’s really awful run down retail complex on Chambers Flat Road but also a beautiful brand new shopping complex on Browns Plains Road. There’s also plenty of new builds, though a lot of these developments are heavily investor owned and filled with rubbish tenants.

Crestmead: Similar to Marsden but probably a slightly poorer demographic. It has a bad reputation with the locals but not so much externally. I personally don’t dislike it all that much, but there is a stigma and you do need to be careful where you buy- one bad neighbour can be a real drama, a street full is a nightmare. There’s a huge amount of development happening directly below in Logan Reserve and Park Ridge, which should hopefully mean a bit of gentrification. On the other hand, what is it going to do to prices?

Edens Landing: Great area full of owner occupiers and quality homes. Similarly to somewhere like Regents Park, the yields are poorer than surrounding areas on account of its desirability. Despite the train station and new Holmview shops (GREAT shops!), I don’t think strong growth is on the horizon. Also keep an eye out for drainage problems from the homes above yours.
Buy sharply here and you’ll be really happy with it.

Tanah Merah: Think of this as little east side. It’s a nicer area than Loganholme but not quite a Shailer Park. Unfortunately prices have risen in the last few years and it’s not quite the bargain it used to be, so yields aren’t great, but it’s still my #1 pick in Logan. My partner and I are personally looking at buying here to move ourselves in the next six to twelve months. There’s a few pockets that have really easy access to the highway but don’t feel like they’re anywhere near it and if you pick carefully you can be completely surrounded in quality homes/neighbours.

Bethania: I’m not a big fan except for the fact that it’s cheap. There are a few streets particularly towards the river that are great quality with lots of owner occupiers, but the rest of the suburb is largely full of the lowest demographic. I recently spent a bit of time investigating some lowset bricks here with a forum member who had the same budget and he found some great options that had the space for a granny flat or LONG-term future development. If you’d like I can get you two in touch and he can share what he found with you?

Daisy Hill, Shailer Park, Springwood: $$$$$$$ and rising. Unfortunately I don’t think you’ll find anything in your price range that’s worth buying. I’m on the fence as to whether this is still generally a good area to buy in, I’m not sure if we’ll keep seeing the same sharply rising growth we’ve seen in the past two years. I think if you hedged your bets on the Springwood CBD and bought something a bit tired within walking distance you’d be very happy as the area developed. If something happens and the CBD doesn’t go ahead, anyone who bought around here is likely to be pretty unhappy- though all indicators suggest it’s definitely going ahead, and soon!

 

Firstly, sorry for my late response and hope everyone enjoyed the Christmas break.

Thanks to all of you for your input, really appreciate it.

I've just started breaking down the numbers for suburbs and definitely see some potential in there. As I do not live locally, can you see if the areas mentioned are getting better over the years? Or still pretty much the same?

Just to make a point. We do live in western part of Sydney, so we are well aware that you can find good streets in bad suburb for good money. The value will increase over the years as the suburb transform. I'm aware Logan suburbs will not experience same growth as western Sydney, but still would love to see some growth.

 

Stay the hell away from these suburbs...too many southern (NSW & VIC) idiots....buying without knowledge of the market.....there is now an issue with high vacancies.

 

Logan Central and surrounds will boom. It's not a matter of if it's just about when. I was in Brisbane over the Christmas period and I was very impressed with the southside of Brisbane and its affordability.

 

The better suburbs yes...but would be a lot less for the lower socio side...sure it will go up along with the market but it will be the last suburbs and typically at the end of the cycle.

And at the end of the cycle people need to be out of those or else it goes backwards again....

 

Western Sydney is turning...as other like @euro73 have pointed our there ability to pay increasing prices are no longer sustainable. The primary reason is the ability of people to borrow...in partiuclar Sydney.

The demographers are saying that there is trend (small window) to cash out now and move to the coast by retirees....after the correction in Sydney it will be flat for another 8-10 years...just cycles sonny.

As for Logan lower socio......it is not quality stuff...the growth to date shows it all....

 

Incredibly uninformed. My drug lord says local customers few on the ground and growth is the very rich kids mostly from the inner 5km ring. Especially delighted in the increase of high profile sportsmen sniffing away. .....