Sanity Check

Looking for a sanity check...

We have a equity available (in other IPs ) to fund finance for $600k. Traditionally we have bought existing properties in Sydney, and now looking for the next.

Tossing up between dual occ build in Gatton/T'woomba or a existing house in Melbourne ( suburb not narrowed down.

We have good serviceability if needed, looking for cash flow +ve or neutral, and equity growth over a 10 year period.

Its a broad question, but who has a crystal ball and some insight and want to offer some comparisons between the two approaches.

 

If the timeframe is 10 years long, you can't go wrong with any options really from equity growth point of view. Just go for wherever you can find better returns.

 

I'd lean towards Melbourne.

I would expect good growth in both, but believe Melbourne has more backing it up and less risk. Ideally if you could do a new dual occ build in Melbourne as you get the instant equity, cash flow and depreciation straight up in a safer market. Existing should do well also, go closest to CBD you can afford with good transport.

 

Have you done any numbers for land and a dual occupancy build in Gatton/Toowoomba?
That would probably give you a good idea of whether look further into it.

 

Thanks all - Gatton land plus build and subdivision should be $550k, with rent at $600+-pw I think. Plus great depriciation.

St Albans $400k, $320pw. I could possibly drop $100k for a gf and rent would be combined $600pw ( as an option..)

I think Melbourne is a safer bet but is Gatton a "bad" or very risky option is what I'm wondering?

J.

 

What is going to cause growth in Gatton?

 

New airport, road construction making the area easier to drive to from Brisbane...Open for feedback to these assumptions but these are the generally quoted drivers of change and growth there.

 

New airport where? The new Wellcamp airport is between Toowoomba and Oakey?
I thought the benefit would be for Toowoomba.
Gatton is sort of neither Toowoomba or Ispwich/Brisbane.
If your serviceability is good why not go for a Melbourne purchase or Brisbane metro area?

 

Did the new jail ever get built in Gatton?

 

Yep.

I assumed the airport would help the whole region? ( maybe a 50km sort of radius?).

As I look on Melbourne the returns are pretty weak but $400-$500k will get you 600sqm within 20km of the cbd.

( I love apples and oranges but wish I could compare them easier!)