Newbie - First post - help narrow down search for next IP

Discussion in 'Where to Buy' started by d3outguncom, 13th Mar, 2020.

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  1. d3outguncom

    d3outguncom Well-Known Member

    Joined:
    8th Mar, 2020
    Posts:
    84
    Location:
    Sydney
    Firstly, this site, and you people, are freaking awesome.

    Background: Couple, early-mid 50s (not first marriage). Have invested in property before (a number of PPORs, investments, shares in developments, etc.) – lost it all in 2 bad developments with 2 bad people. Started again from nothing 10 years ago.

    Goals: Looking to semi-retire in 2027 (we are self-employed running an education consultancy – can run it from anywhere). Plan is to move from Sydney to the Sunshine Coast at that time and work 6 months of the year. Ultimate goal is $60k/yr each in passive income – don’t need that in 7 years, do want to be well on the way.

    Current investment situation: Started re-investing in property 2 years ago. Bought 4br house on 500m on Sunshine Coast, returning 5.5% gross 2 years ago, another last year. First one has no renovation potential, will return steady yield (near Uni), not great growth. Second has good reno potential to improve yield.

    Next property (and this question): We set up SMSF to purchase next properties. We don’t necessarily want to buy another on Sunshine Coast, although aren’t dismissing it. Budget is $7-800k (this will allow 30% deposit and fees, and still allow us to buy another one the next year). Goal is capital growth with 4% gross yield, as current 2 IPs are yield so want to balance portfolio, and maximise opportunity to refinance as won’t be able to as much with other 2 (we put max allowable $50k/yr into super which with rent will more than cover next 2 purchases). Already have pre-approval with lender. Looking to pull the trigger this financial year (next 3 months)

    We thought a BA would be good to find stuff in areas we are not familiar in and save the time and money we invested in getting familiar with Sunshine Coast in new areas – but they seem more interested in pushing stock they have with developers than finding what we have said we are looking for, and $15k fee makes us feel like we’re better off doing it ourselves – established properties with capital and yield add opportunity down the track – so we are going to do it on our own. We are planning to stick to the 3-4br 2 bath house on 400m+ (as this one is likely to be closer to a CBD and so smaller lots), have been doing our research (thanks again to everyone here), and have narrowed it down to north of Brisbane (yes, will take us over land tax threshold) and Melbourne ring (+/- 10-15km from CBD). Looking at common fundamentals for IP – infrastructure that attracts businesses, close to transport to get to city, no large development lots for H&L packages to flood market, mostly owner occupied, “bridesmaid” suburbs, avoid housing commission, etc. So – now over to you – where do we start our search?

    Here are some suggestions you have made to similar questions in other posts (I have no familiarity with any of these yet):

    Melbourne:

    · Dandenong North

    · Noble Park

    · Mulgrave

    · Reservoir

    · Preston


    Brisbane:

    · Everton Park

    · Stafford

    · Ferny grove

    · Arana

    · McDowall

    · Keperra

    · Ferny hills

    · Geebung

    · Zilmere
     
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  2. thatbum

    thatbum Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    4,022
    Location:
    Perth, WA
    I have to admit that I thought after some of your experiences, you might bit a bit gun-shy from investing in areas that you don't know that well personally? Maybe that might be a better strategy? I'm just spit-balling though, as I'm more curious about your strategy and mindset!
     
  3. d3outguncom

    d3outguncom Well-Known Member

    Joined:
    8th Mar, 2020
    Posts:
    84
    Location:
    Sydney
    I don't believe I've said I had any bad experiences in unfamiliar areas so not sure where you're getting that from. The investments I lost from were in areas I know well. They were with people who were crooks (guess I didn't do as good due diligence on them as I did on the deal). The 2 IPs I have are in areas until 2 years ago I knew nothing about and did what I needed to so that I did know them. That's what I'm looking to start doing in another area for the next IP.

    As for strategy, diversification of areas seems to be a common one, so only investing in areas I know would mean all the IPs are in 1 area - the Sunshine Coast (and as I said, I'm not averse to that, just don't want to have that as my only option). Doesn't feel like a good strategy. If you have some suggestions that fit the criteria I've laid out. I'd love to hear them.
     
  4. The Grinch

    The Grinch Well-Known Member

    Joined:
    22nd Sep, 2019
    Posts:
    229
    Location:
    Cairns
    Maybe look at south west sydney for diversification. Plenty in that range and a lot going on for growth drivers.
     
  5. James Fontaine

    James Fontaine Member

    Joined:
    29th Nov, 2019
    Posts:
    9
    Location:
    Sunshine Coast
    Hi,

    Looks as though you have a very good idea of what you are looking for, which is half the battle!

    I live and work on the sunshine coast, so very biased to the market here! Some really great growth potential and yields all in one here. As you would see from your current properties.

    I cant help with Melbourne but I am always driving around Brisbane to meet with clients, so if you ever need me to scope out an area, let me know. Dont worry I am not a buyers agent! haha.

    We have clients who have purchased in Everton Park, Ferny Hills and Bridgeman Downs and the feedback and research is all positive. The properties have been rented really quickly and achieved good yields.

    Happy hunting mate.
     
  6. KingBendtner

    KingBendtner Well-Known Member

    Joined:
    9th Oct, 2015
    Posts:
    82
    Location:
    Melbourne
    Hi there, I like that you have a goal in mind and a rough plan.
    Although I'm not sure with your comment "maximise opportunity to refinance", what do you mean by this?

    I am a Reservoir local, so can vouch for the area. And also Preston, as it is next to Reservoir.
    7-800k is a good solid budget to have.
    IMHO, if you point a gun to my head then I'd pick Melbourne anytime of the day.
    1) Diversifying your risk (out of QLD)
    2) Just get into the Melbourne bandwagon and enjoy the ride
     
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  7. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
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    Location:
    Melbourne
    Looking at the market down this way (SE Melb), I am seeing a LOT more stock on the market a bit closer in than a few months ago (for obvious reasons) - IMHO worth looking at Clayton South (Westall end).

    Mulgrave is ok, but can be a pain for transport (need to bus out to Springy or GW in normal times).

    Also seeing some interesting looking deals popping up in my neck of the woods - so keep an eye on Doncaster East/Donvale (along 905, 906, 907, and 908 bus routings) and Mitcham/Ringwood rail stretch.



    The Y-man
     
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  8. RaoulDuke66

    RaoulDuke66 Well-Known Member

    Joined:
    25th Feb, 2019
    Posts:
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    Location:
    Brisbane
    I would pile up cash and if I did indeed semi retire to the Sunshine Coast in 2027 I'd buy an IP there at that time. But then I like to keep life simple and stress free.
     
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  9. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    15th Aug, 2005
    Posts:
    7,538
    Location:
    Gold Coast
    Ahhh a life of no problems :)

    I heard a TED talk from a lady that said if one doesnt want problems in life, we have dead peoples goals

    ta

    rolf
     
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  10. iloveqld

    iloveqld Well-Known Member

    Joined:
    11th Jan, 2017
    Posts:
    325
    Location:
    Brisbane
    I am eager to learn the same, so from here, we are going to look at Melbourne, any more suggestions of suburbs on the similar price range please.

    PS: Even I am reading a lot of stock information today, but I feel like too much time spent on gambling (personal feeling only, please be nice), I would like to expand my portfolio from QLD to Melbourne as well.
     
  11. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    10,119
    Location:
    Brisbane
    I'd be interested to know if you are paying land tax now?

    The more you buy in the one state the more you start paying in land tax.
     
  12. Jess Peletier

    Jess Peletier Mortgages, Finance & Property Strategy Aust Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
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    Location:
    Perth WA
    I'm interested as to your strategy to achieve $60k in passive income - when do you need that by? And how far along do you need to be in 7 years?

    We've got some great products that are really helpful when it comes to quickly narrowing down the research side of things - you can check them out in my signature below.