Positive gearing (or close to positive) in Brisbane?

Hi there,

I´m very interested in getting my first investment propertty however given the uncertain nature of my work, as a contractor, I don't think being negatively geared would be doable, at least in a cashflow sense.

Would anyone with much more knowledge than me (not difficult!) suggest areas/regions around Brisbane where the rental yield and occupancy would be solid enough to be able to cover a small negative cashflow or even have a positive return so the house will pay itself over time?

Looking up to around $400k - $450k max.

Also interested if there is a more specific type of building that might fit into this profile (e.g. apartment v townhouse v house)?

Cheers!

 

Depends on your finance arrangements.

Any property can be cash flow positive if you put down a big enough deposit to have a smaller loan.
Marg

 

Good on you for getting into an investment property, just be clear on your strategy and goals- especially around capital growth if that is what you are looking for.

 

If you are talking about an 80% LVR, which is the most common situation these days, there are a lot of areas in Brisbane that can suit you well.

But with 400-450k budget, I would say some further BCC areas, some Moreton Bay suburbs, and most of logan and ipswich.

 

Can do the maths on this pretty easily:

Assuming a loan of $400k at 4% p&i you need to be netting ~$20k per year to be neutral. Add in rates, insurance, PM fees and hopefully only minor maintenance add another $6-7k. So grossing $26k per year (or $500 week) rent would meet your objective.

It is hard to find freestanding homes at that price with rental yields at that level (+6.5%) in Brisbane city council. You would probably need to look at apartments, student accommodation, share house, multi person dwellings etc. If you cast the net wider to Ipswich, Logan etc there are more options in this regard - Duplexes, granny flats, large family houses etc

 

You can jag a house in Keperra for $450k that will rent around $400-$420. Beats being way out of town for the same price.

 

I recently bought in Redcliffe for 430k and get 430 a week rent. Had a 185k deposit so it’s looking pretty good.
Strathpine might be an option?

 

Spot on. It is really hard to find within Brisbane CBD, even in MBRC.

Only possibility is buying with reasonable Reno- in this case buying price could be lower so you can make money from day1.

 

No no no.... this is far too simplistic.

What about depreciation?
What about the individual's effective tax rate?

To the OP - 2 properties can be side by side, same price, same rent, yet one can be neutral/positive whilst the other negative.... please think about why.

 

In which part of the Brisbane new land house give positive yield with depreciation? Not any land and property I am aware of. May be less land house could but it’s capital appreciation is an issue. His calcs is based on older property which has very minimal depreciation. If Reno is done then may be 2k depreciation per annum which is negligible anyway.

 

You could always start by investing in something which makes you cash - like good mutual funds.

 

When you say Brisbane are you including the wider Brisbane area? I just picked up one on the weekend for a client we got a 4 bedroom fully renovated house with 3 living area's on a corner block almost 700m2 for $280,000 with a rental estimate of $400+ per week. It is in Logan and google says its approx 35 minutes drive to Brisbane CBD. Not bad for almost 7.5% yield and ready to rent no renovation required! There are some great deals in Brisbane at the moment IF you know where to look.

I'm more than happy to meet anyone for coffee in Brisbane to disclose the address on this property and other cash flow positive properties I've picked up for clients.