QLD Logan hot spots! Insider knowledge

This is where inexperienced investors are becoming undone......sure you may get 6-7% yields...but they fail to see in heavily investor driven markets like Logan.....rents drop aggressively as the supply of rents increases...and along with this you can potentially get negative equity.

Stuff of real stupidity...... I am seeing the same thing in Mt Druitt surrounding areas a lot of people jumped into the Druie suburbs around the high 2s and low 3. Now prices have come off and still dropping.....for example there a couple of places advertised for 410-450k. Rents are now only 310-340pw due to oversupply. Rents have come off about 20-40pw

As an example lets say someone bought in the Druie in late 2015 for 280k. They would have paid about 12k stamps and legals. Judging by one on the market at 419-439k...they have spend some renos about 20k plus say 10k to sell...it will probbably rent for $350pw after renos. Lets say they sell at 420k.

So based on this their total cost they invested is about $322k. So the total profit is about 98k. Really..... a 100k profit? Is that worth it for lower socio areas....I can see profits in Logan even lower...as it will not boom like Sydney.

 

Good insights and yes, $100k profit in booming market is not much. I guess depends on the strategies too and your borrow capacity. Here in Melbourne there are heaps of good buy in the 1/2M range where you can potentially make a lot of money. Cannot comment much on the above numbers as I don`t know the areas well enough, including Strat and Logan. Mine was a general comment, approach. Strat is hot at the moment, every one wants to buy there because of Uni and other potentials. It is a seller market and I don`t see it stopping in the short term. Logan is the opposite. Similar assets will be paid $50k more in Strat and $50k less in Logan. I think it all comes back to how well you buy which is easier in Logan at the moment due to less people willing to buy. Yield helps but it is only a plus.

 

Whilst this does apply to quite a bit of the investor favoured suburbs in Logan if you steer clear of those there are a few suburbs that continue to consistently track well if they are close to transport, freeways, infrastructure etc and are favoured by owner occupiers....just stay away from the herd and buy where families have demand and have a higher disposable income....this isn't LSE Logan though....

 

I tried to tell people this 2 years ago...but they got shooitees.......too many ...idiots out there....who know better.

 

Ditto...100% agree.......unfortunately....too many people are copying the people who are in magazine and some buyers agents....a recipe for disaster.....

 

Hi Sash, you seem to be particularly one-sided of late.

I haven't bought in QLD (yet) so I, and I'm sure others, are keen to hear your thoughts on where you'd instead invest in 2019? Open to hear it as this will provide context around your more recent comments.

 

Yes I am....I am currently sitting on my hands as I am in the process of finishing off some developments in Geelong.

As for where I would invest...I am leaning more towards bluechips areas in Adelaide, Brisbane, and Perth. But the caveat is where you can value add and build equity and have about a 5% return. I hard ask....

 

Actually I know many sophisticated investors took your so called stupidity and acquired very high level of sucess/return/ risk management. just checked out Phil tarrant @ smart property investment podcast

And your calculation is Druie is off anyway. They did not invest 322k ! the amount invested is cash dep + stam duty + reno ... Depending on your LVR, it looks like a 100% -200% return in your example. What else do you expect?

 

Well, he mentioned the property was purchased in late 2015. Its already near the end of the boom .... So, 100k is pretty good IMO given the bad timing + CF position.

5% growth in a 2 mil portfolio with a strong CF looks more attractive to me than a 8% growth in a 1 mil porfolio (due to negative CF and hence lower borrowing capacity)

 

Mate...ya need to read......correct 322k...is dep + stamps + reno.

I would seem you are very emotional about it..... $100k is not a lot....there is a thing called opportunity cost. No offence...but a lot of Smart Property stuff is very biased.

I stopped listening to some of the rubbish out there...i am running my own race...30 properties later....

 

Mate ...again you getting emotional like others before you.

Fact 1 - property value are not static.....even if you bought in say 2012 when the boom started you would have paid around 240k....timing of the sale is critical otherwise you loose equity.

Too many newbies are getting sucked in by people .....who seem to bu rubbish.....

 

lol, why is it emotional when all info mentioned is your provided figure?? Why are you assuming people need to sell the property to gain the profit?

yeah, talking about opportunity cost, tell me where u can do better with a late 2015 purchase (as u mentioned) with such low entry cost; high return and strong cf?

 

No u need to read again!! as your example, a 300k property purchase with 10%dep and 5% purchasing cost will require less then 50k to settle. Then positive gearing as ur stats means little $ required to hold this property; leading to lower opportunity cost. Still, you still gain an additional value of 100k. its 200% return there in a couple of years for such low risk investment

And all you can say is I am emotional whereas these figures are provided by u ???

 

Mate 100k is usually my starting point........anyway no point bickering..... you sound like some called Retire Rich 101....who used to post....

 

Why should I care if your starting point is 100k or 500k? Am i a cent richer by knowing this?

If you are able to enlighten me why this is a bad investment, its highly appreciated so th I can get some further insight.

But info u provided so far does not stack up with ur conclusion at all. And u just dont want to argue about this . Wat a waste of my time.

 

Ole confucious sayin' ...... "when the student is ready the teacher appears" ......

A even know a few who keep buyin' in Logan ... concentrated risk. I don't know what is about certain groups...but a lot of young people seem to hang with certain brokers and buyers agents trying to emulate the success. You hear about things about hangin' around people who have had success....I laugh at this...if they only knew....

Any way good luck buddy...

 

Here is something to back-up what I am sayin'

Most popular suburbs for sales in Brisbane this year

 

Sash, What are you saying?

(a) Forest Lake is a better buy than logan because everyone else is buying there
or
(b) The sheep are all buying at Forest Lake due to following magazine articles.
or
(c) something entirely different that is unclear to me and i assume others.

To me this is showing the inner city ripple effect moving outwards in Brisbane.

 

Forest Lake is definitely a better market than Logan lower socio.

The article simply highlight that that outside of BCC ...Moreton Bay and Cleveland are out performing Logan...simply as that.....

 

Stats on Re.com.au suggest otherwise performance wise although median is higher for Forest Lake and so would be the socio economic given higher prices.
Forest lake 2.4% Growth/ Avg Yield 4.9%
Logan Central 5.1% Growth / Avg Yield 5.1%
Beenleigh 4.7% Growth / Average Yield 5.3%

Moreton Bay has already jumped this cycle, too late now imho