QLD Million Dollar Brisbane Ideas

So where would you invest 1 million dollars in Brisbane with following objectives in mind?

1. Capital growth (both short and long term but really want this investment to generate equity in 1-3 years timeframe to fund further portfolio growth).
2. Ability to increase returns in medium to long term (redevelopment/rebuild/subdivision/renovation in 5+ years time frame).
3. Must return at-least $600 per week in rental returns.
4. Low maintenance and rentable (not looking for a project in the short term)

The options seem to be many in this price range in Brisbane (ranging from 405sqm blocks in 0-5km suburbs to splitter blocks in 5-10km distance to CBD suburbs).

I know there are many Brisbane experts on the forum and would be great to hear some ideas.

Cheers

 

I'm no expert but have been eyeing off some of the splitter blocks or LMR blocks 5-10km out at the $700-$900mark. Not looking to develop but hold for the medium term.
I'd wouldn't expect much more than 3.5% gross yield.

21 Araluen Street Kedron Qld 4031 - House for Sale #124724134 - realestate.com.au
34 Clive St Annerley Qld 4103 - House for Sale #124613582 - realestate.com.au
14 Dalley Street Kelvin Grove Qld 4059 - House for Sale #124499070 - realestate.com.au
19 Albemarle St Yeerongpilly Qld 4105 - House for Sale #124594818 - realestate.com.au
34 Lanham Avenue Grange Qld 4051 - House for Sale #124544862 - realestate.com.au
30 Main Avenue Wavell Heights Qld 4012 - House for Sale #124311922 - realestate.com.au

 

If you pay 1 million and it rises to 1.2 in two years and you are getting $600 per week rent will you have the serviceability to pull the equity and go again?

 

Thanks for sharing examples. Any more insights are you able to share?

Yes, serviceability is not a concern at this stage of my investing journey. I have a good portfolio LVR, overall positively geared portfolio and a rising income.

 

Perfect! I think its a good idea to know where you sit serviceability wise at the moment to ensure your next purchase doesn't take you to the serviceability wall.

 

I remember the Wavell one selling a couple of years ago. They obviously didn't have the money to proceed. Lots of 400m2 properties on main ave that were split in the past. I am pretty sure the current owner will make money on the buy and hold nonetheless.

 

@Whitecat Really keen to know your views on this thread!

 

It's a tough-call, because if we knew the answers, would be doing it ourselves. Anyhow from recent observations:

1. Land prices for 405 sqm lots have risen significantly lately, for example, in Everton Park, you could pick up a 405 sqm lot (where somebody has done the subdivision) for about $300K and under, but now the cost is about $400K - $450K. In fact, if you ripple through from Everton Park, Enoggera, Ashgrove, Paddington, just keeping adding a $100K for each suburb. To build a modern house, of around the 250 sqm - 300 sqm mark, you are looking around $300K - $400K, so the challenge is to get the land/build a house and have the end result stack up. Say for Everton Park, modern contemporary homes are just scraping into the $800K mark (high 7s / low 8s), so the land value at $400K plus doesn't quite yet stack up, needs to be some further uplift in the market to make viable.
2. To buy a Queenslander on a big block, if it's renovated it will be expensive as the cost of renovating Queenslanders is expensive, if it's older it may need some renovation / tidy-up / makeover, and of course the subdivision / development opportunities are limited to the size of the house, if it is zoned for character in-fill etc.
3. Finding a Post-War house on a large lot that could be subdivided/split is also an opportunity, but depending on the condition of the house, may not achieve the rental income desired, or may need some basic renovation / aircon, etc. A lot of these houses have 1 bathroom where people are looking for 2 bathrooms.

So there is a challenge between older / but development potential and newer with rental / growth potential and all in between.

In all honesty if you are serious about this, you do need to contact a Brisbane specialist to assist you who knows the ins and outs of the zoning and development potential, like Shane Hiscock , buy and hold BA like Property Searchers, or developer like Rob Flux.

 

Buy in the North or the inner South. Get land and a property that can be shifted around on that land even 600m2 is fine but you want access.
Pretty much all of Shady's properties look good. Note all auction. I would say more the 900 than the 700 for a lot of those.
Agree that this is obvious and all splitters or large blocks are priced in. You wouldn't necessarily make a move right now. Unless you really know what you are doing with development, but in the meantime you are getting not such a bad yield all things consider.
I cannot think of another place in Australia that offers better opportunity at the moment. Perhaps very inner Adelaide has some potential but pretty much all of Shady's suggestions are solid propositions imho.
Will post more later

 

I know of a 405m2 property in Everton Park near the Matilda that will come up for sale at the end of this year. It might be worth demolishing and building a two storey with city views. The current house would be rentable after a few grand in maintenance. By the time the new house is built, the new value should be higher than it is currently. Private off market sale? (I cant get finance, so no use to me)

 

I agree with @Whitecat - think the opportunities within Brisbane (LGA) are great especially considering development and value-added opportunities.

 

Absolutely agree - there's so much opportunity and choice that you get overwhelmed.

My current thinking is leaning towards what @Whitecat said and there seems to be one of the two routes. Either get a double story renovated house in suburbs like Ashgrove (405sqm, around a million mark, weekly rental expectation around $800) or go for a bigger lot in inner south /splitter block in suburbs like MGE.

Being spoilt for choice is a good thing after all.

 

Here's one in Everton Park, the classic 809 sqm lot, with a post-war house. Asking price is a little expensive. As it cost about $100K to subdivide, it would be a challenge to make money immediately on a subdivision unless you could buy cheaper, so bit of a land-banking at this stage would be the way to go, spend a little money on the house to make it more tidy, could rent out for a bit and do the subdivision later as land prices increase, sell the lots or build a modern contemporary house on one and sell the other.

118 Gordon Parade Everton Park Qld 4053 - House for Sale #124794898 - realestate.com.au

Note I have previously done a subdivision in the area but the house was just over $400K when bought back in 2007, so Yes, Sydney has rocketed on, and Brisbane has trickled along but equivalent properties that have subdivision potential are pretty much double now in the 10 years since, and I do think the trend will continue.

Examples of modern contemporary houses being built in the area are thus:
10 Felstead Street Everton Park Qld 4053 - House for Sale #124433830 - realestate.com.au
87 Gordon Parade, Everton Park, Qld 4053 - Property Details

This is what I'm seeing happening, post-war / 60s / 70s housing stock is being replaced by modern housing. Similar for many Brisbane suburbs around the inner northern and southern 10km ring. For example, happening in Salisbury / Moorooka / Upper Mt Gravatt on the south side as it is in Everton Park, Michelton, Enoggera, Stafford, Wavell Heights etc on the northside.

(One should see how the older housing stock is demolished, a big backhoe comes in one morning, does a few swings and knocks the whole place down, the land is cleared within a day or two. It's a pretty easy job, usually not a lot of concrete slab to remove. There are removal homes, but the preferred is pre-WWII Queenslanders, nobody wants post-war houses, and is cheap to demolish about $15k, the trend will continue).

 

I went to a few opens in inner city suburbs today. There's definitely lots of demand and activity for houses priced around the $800k-1million segment. Most of the people who were turning up to buy those homes seemed to be local families & couples and that's definitely a good sign. One house on a large block in Newmarket is going for auction in 3 weeks, they had two opens today and the one I went to was attended by 10 or so other parties - all of them professional couples or families.

There are definitely bargains out there but they are a lot fewer than the sense you get from RE websites (thanks to agents not updating under contact/sold listings for months). Almost all opens that I attended, houses were priced well over their RP data valuation which means the market is turning into sellers' favour.

Overall, good signs for Brisbane!

 

I

Would agree with this. This is not uncommon for bcc.

 

Also check out Mitchelton. I live one suburb away (across the Kedron Brook) in Everton Hills. There are a lot of larger blocks in Mitchelton with post war homes. These are being demolished with 2 x smaller modern homes built. Mitchelton is under 10km from city, has the train line, schools, shops, farmers markets etc.

 

Exchanged contracts on a property (yes it was quick turnaround this time)

Its a post war home within 5-6km cbd perimeter. A bigger block (nearly 600sqm), renovated 5 years ago, great city views and generally an elegant looking house.

It was sold week 1 on the market but then the contract crashed when the buyer couple (first home buyers) got all panicky after seeing a few issues on B&P without realising it was 1950s home after all. I requested a copy of the reports from the crashed contract and was happy to ignore the concerns (nothing major really).

Negotiated the price down to well under $900k, rental assessment is around $700 per week. Zoning is medium density residential (up to 3 stories) and property is 100 meters from express bus stop to city.

The sweetest bit - Commbank app valuation is $130k more than the purchase price. I don't know how much trust to place in auto-vals but its rare to get them over the purchase price by this much.

 

Congratulations. Sounds like something we have been looking to buy. Good price. Took me a while last year to find something similar to yours and ended up buying a 5 bedroom 1920s Queenslander approx 2km to CBD, great city views too and the land size is also nearly 600m2. However mine does need a fair bit of works (bones are good so nothing major) but still very liveable. Bought for early 900s and was happy with the purchase.