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

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

 

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!

 

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.

 

Maybe look at south west sydney for diversification. Plenty in that range and a lot going on for growth drivers.

 

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.

 

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

 

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.

 

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.

 

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?

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