Seeking advice - Considering H&L packages in Redbank Plains (QLD) or Springdale Heights (NSW)

Andres, post: 193640, member: 5092"]

Totally understand your point regarding the price point and relative location, it all makes sense. Given this will be only our second IP, would you suggest reducing the price point to around $300k and buying around Goodna, etc,

HI @Andres

With regards to the price point comparison, the point I was trying to make was that if you can pay 450k for a place 30km from the CBD or pay 450K for a place 15km from the CBD, then I know which one I would be choosing for better chance of quicker CG. For me, the only reason I would choose the further location from the CBD is if the property had add value potential or I was really cash flow sensitive and wanted something neutrally geared as opposed to slightly negative. But that is because that suits my plans/goals. But you said you are not CF sencitive, so If it were my I would be trying to get closer to the CBD with reasonable yields. This is just my approach/perspective, others may differ so you need to try and decide what is best for your financial situation and goals. It all comes down to those two things imo.


or utilise the full max amount of $450k and look at areas much closer to the CBD? Which strategy do you think would allow quicker generation of equity for another future purchase?

If 450k was my max, then I would be looking to buy an extablished house as close to the CBD as my 450k would let me buy, below market value if possible and something I could add vaue too perhaps in the future. For me, that's what I believe will have the best chance to build/extract equity the quickest. But you can ask 10 investors.. and they would probably give you a few different answers, based on their own financial situation, goals etc.

But I think what your doing right now is great. Your reading and learning, plus your engaging with other investors on the forum to get their perspective/experience/advice and then trying to piece everything together to make a better informed decision for your next IP. Good on you.



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May I know which BA or agent is this that you have engaged ?

 

Is it ok to post that sort of information on here? Or should I PM you instead?

 

if you are going to get H&L = really no need to get a BA, - just get the estate map and choose your plot. if you are going to get properties landed pre-existing where there will be just too many to scan through and learning the suburbs (you need a BA). i've spend nearly 3 months learning new surbubs (and it's hard work going to the inspections)

 

Hi Andres

A 3 year old house still has significant depreciation to be claimed.
A 10 year old place isn't too bad either, there are calculators online where you can enter the age, state and build quality and obtain a very basic idea of how much can be claimed each year.

 

Thanks for your input

So are you also based interstate trying to purchase in QLD? Curious to know how many visits you have made to learn a suburb before buying

 

Yeah good point, would something like this be fine to use?
Tax Depreciation Calculator & App | BMT Tax Depreciation

 

nope but i have bought land without visiting the site (well the site was not there basically just a dirt field). with H&L just need to look at the overall estate plan

 

Yes

 

I am from Sydney. I visited 5 properties in one council area and bought the 5th one that I inspected. IMO stager them in different suburbs to try paint a better picture of the area in general.

 

Hi Andreas

I'd spend a bit of time reading up on the forum before you go with this " independent " group . They're are there to sell you product . Property , finance and Legal services .

They may be ok BUT , they may not . They make their money by being good at what they do which is selling .

No way would I be recommending a property in Ipswich for over 400 .....

The main reason to be buying at the moment in Brisbane is because of the expected SHORT TERM gain ...

Buying a property and watching it go side ways for seven years isn't fun ....

If you want someone to organise finance for you there are several highly regarded brokers on the forum who are independent.

They are there , try's to sell you these properties because they are getting a very nice commission and everything they say is geared to that .

Cliff

 

We've bought interstate before .

Before going we spent a fair bit of time reading everything available on the forum ( here and somersoft ) . On the basis of this research we chose three areas to visit . Went up and drove around looking at those areas and then decided on which area to target .

There is no way that as an interstate investor you can get to know a suburb the way that a local does . But . Talk to property managers about what type of properties rent well and which areas / streets to avoid .

Spent time looking at rental listings as well as sales listings . One particular development we looked at about three years ago had rental estimates that were considerably above what actual properties were available to rent for .

Check out vacancy rates ( sqm research ) . If there's a whole pile of new development bein marketed to investors , do you know the demand is there . The vast majority of properties we buy are established properties in established areas where there is a " mature " rental market with a low possibility of a flood of similar properties hitting the market .

Two properties on one title means that the only person likely to buy is an investor so that seriously limits your potential capital growth and that IS where you make most of your money in property investing . All cash flow does is help you hold more properties .

Cliff

 

Andres

We've bought 3 H&L packages at about the same time from a 'buyers agent' group before - and in fact they're not technically a BA, because they only sell new stock from particular developers, and as others have said potentially get a commission. It took about 3-4 years before we saw any growth in any of them. Like a previous post said, sideways ain't fun.

The issue I have with such groups is that there is an inherent conflict for them, whilst they purport to be acting for you - it is in their interest to get you to buy from their stock, and not tell you to buy an existing build down the road. A real BA would give you independent advice. So as others have said, tread carefully.

I don't have anything against genuine BAs, and I get there are reasons for using a BA, and I don't mind using a BA. My wife and I both have busy jobs and just don't have the time to engage in the necessary research (maybe I'm just lazy...), so for our next IP in QLD are using a BA. But if you proceed then make sure it IS a BA, and not someone purporting to be one but getting a kickback (of your equity) from someone else.

Btw, first post here, but I joined SS 15 years ago (when I recall SeeChange used to call himself Apprentice Time Lord!) and only recently migrated to this Forum.

 

Ok similar to me I guess, that's pretty good to get one after your 5th, was the bidding process onerous?

 

Thanks so much Cliff, really appreciate your insight. I also really got a lot from your Goodna thread also.

It certainly seems that while these guys MAY be ok, all signs and logical conclusions point to them trying to flog off properties that provide them with commissions. I mean it's a pretty logical assessment.

I also agree with your comment about short term gain and similar to what Leo said earlier, Brisbane houses are at the 9 o'clock and the reason to jump on now is to get in at the right time before the boom. I think I need to shift my expectations to the short-medium term

 

Man so much useful information here, thanks heaps!

Yeah your process sounds good, once I have my target areas I would like to visit these areas and speak to some agents (saw your preferred agent in Goodna) and start to learn where is good and not so good to buy.

Really sounds like the way to go is to really look at the data, look at the vacancy rates, look at the rental yield charts, etc.

The last point you made about the dual occupancy titles is something I never thought of, it really does limit your pool of potential purchasers as a OO will be unlikely to buy there. However I am curious, do you generally sell most of your investments after 5-7 years?

 

Thanks so much for sharing your experiences, really interesting to hear about your H&L packages. Did they sell them to you similar to what I'm hearing? I'm guessing you wouldn't go down this route again? Did you experience any maintenance issues with the properties or difficulties renting them out after purchase?

Yeah I've definitely got alarm bells ringing with the BA now and I think you're right, as much as they claim to be independent it's just so much in their interests to make commissions they can't help flogging off this stuff

Man I'm so glad I posted on this forum!

 

I had two buyers agents bidding on the property, in the end the agent pushed for me because I am young and its my first one so he wanted to see me get it.

 

Sounds like a good BA, were you happy with them? Was this in QLD? Would you recommend them for a novice like myself?

 

We've sold a number of properties on the way to pay down debt , but our aim is to build up a portfolio of fully paid of properties .

We've sold properties to pay down our PPOR and a weekender we bought close to 4 years ago , which are now both fully paid off .

Once we see further growth , we will sell some properties to pay off others .

Cliff