QLD Not sure on Buyers agent advice for my next IP - SE QLD

Hi All,

Moving through to 4th IP purchase before I let things simmer for a few years and start a family.

Dealing with a well known BA - with people on the ground in QLD. I have used BA's before etc etc.

Strategy is driving long term CG - would like the opportunity to SD at some stage however I'm of the belief land closest to Brisbane CBD is the lowest risk in terms of long term CG (20 years)

BA suggesting & recommending I purchase in Petrie, Kallangur etc Highset with zoning potential, larger size block close to amenity - budget upto ~$500k - obviously this is upper end in these areas.

I am cautious in many of these areas upon research on various sites - higher vacancy rates - increasing SOM, lower OO level. Lots of investment activity over last 18-24 months, low SEIFA etc

It almost feels little too much "cut & paste" with many clients being sold IP's in these areas. I am already seeing IO extensions knocked back on various forums and people considering selling their IP's in SE QLD, I want to avoid these areas heavy with investors for such reasons...

OR

Ferny Hills, Keperra etc - Established house, small cosmetic reno. ~4.2-4.4% Gross yield ~$520k budget

Ferny hills shows me 85% + OO, good schools, train line and more professionals moving in over time... I assume this will happen near Petri due to Uni and infrastructure going in but more longer term & hope for gentrification vs closer to CBD areas.....

Any thoughts on the above would be appreciated

Also : I own an IP established house 600m2 Jamboree heights BNE so whether option 1 is a form of diversifying etc.

 

I won't comment on the BA and choice of location - and I'm sure you're all over this but please triple check with your broker/banker that you're good to go for IP4. It's becoming increasingly difficult to secure finance for investors with multiple properties.

Cheers

Jamie

 

Both of those areas are good - it ultimately comes down to what you plan to do with the land and your strategy

* nth brisbane is good but kallangur has too many investors and properties competung for rent although vacancy rates are falling. Surrounding suburbs are a better bet with better oo ratios and better rent
* for sub divisions bcc suburbs are better option as are in more demand

 

Thanks Jamie, yep it was tight - scraping the bottom of the barrel from a lenders perspective. Have pre approval now - previously IP 3 pre app was fine however CBA changed halfway through which made settlement very challenging......

 

I cant afford SD block closer to Brisbane CBD - I know Ferny Hills is within MRBC and not BCC - so its more justa standard buy,hold, reno play.

Only way I can get a potential dev block is to go north and hold for 15+ years until population comes in however this feels like more of a gamble vs buying close to CBD.

 

If you are going to spend $500k on either it’s a No brainer for me. Ferny hills/keperra. Can’t see Petrie/Kallangur etc brings worth $700k in a few years which is basically what you’ll need to make any worthwhile money.

 

Was thinking along the same lines, BA didn't want to go over $450k in those areas - however would be large land content, highset, zoning etc...so would be above the median based on that - holding for 15 years before sub divisions etc

 

Widen your search. I think you are speaking to someone who perhaps only knows one part of the city. There is huge growth down south of the River all the way to NSW border. Why not consider some of the patches in there?

 

We bought in both Ferny Grove and Keperra in 2016. Happy with the purchases. Both have performed consistently. But it is a long term play and I am happy to hold it for another decade or two. Like you have correctly identified, the fundamentals are all there; rail, schools, shopping etc.

I m obviously biased, so take my thoughts with a grain of salt and do your own research.

 

You're effectively comparing a developing investor heavy area with reasonable yields with a predominantly owner occupied area offering poor yields but strong expected long term growth. It's an age old argument and you'd have to do your cashflow vs. expected growth sums.