Something with good Development Potential.....anywhere in Australia

Hi,

I used to regularly study and post in somersoft but after its demise the routine ended.
Nice to see this forum with the old user names and knowledge powerhouses.

In the last four years or so, when the prices were reasonable, I purchased some dual occupancy potential corner blocks in South Western Sydney developments like Edmondson park and Oran Park. I was successful in getting them sub-divided and built dual torrens title dwellings on each of them.

They turned out to be good investments. I have a building company as well so I managed to build all six of them at reasonable pricing and now they are rented and are all positively geared.

Too much land tax though.........arggghhh.

That was just the right timing and I got lucky in Sydney. Now, the prices in Sydney are unbelievable and I don't see much benefit in building for investment purposes in this area now.

BUT I want to invest elsewhere in Australia where I can develop in future. If its interstate, I won't be able to build myself BUT as long as the development potential is great, I can use the local builders.

One thing I have learned from my Overseas and Aussie property investing is that the property cycle is probably the MOST important single factor while purchasing. I have bought in wonderful areas at the wrong timing and they turned out to be dud investment BUT when I purchased in average areas but at the correct timing in property cycle, it worked wonders for me.

So, Keeping the property cycle in mind and development options, I want to purchase somewhere in Australia AND I don't mind holding for mid to long term. Ideally it should be a 5 year wait before I can do something good there but can be a little bit longer as well. It will be a lot better if it's an existing house with some rental potential.

So, I request you to point me towards some directions where I may do some research and come across some good buys. I am happy to look into both RESIDENTIAL AND/OR COMMERCIAL OPTIONS.

I don't expect "ready to serve" investment opportunities to fall in my lap, I am happy to put in many hours in research and travel interstate. All what I ask is your guidance and pointing me towards some good directions.

I want to purchase one property with price tag of 500 to 600k AND another one can be upto 800k.

I look forward to your advise and I thank you in advance. I am

Regards,

JOSH

 

Hmmmm, I was in a similar situation where I had future development potential as a must. I invested up north due to the lack of blocks with feasible holding costs for future development potential in Sydney. The first one we got was in Southport in 2017 Jan, Gold Coast. RD5 zoning which allows for 14 bedrooms, or roughly 4-5 townhouses or 14 one bedroom apartments etc. Southport has has a priority development area (PDA). We're one street away from the edge of the PDA, however the block had a two storey 4 bedroom home with 708sqm. Purchase at 647K. Currently rented for $495 p/w due to putting it on the market in the winter season (bad time for finding long term tenants). Had a six month settlement in place (settled in July 2017) and it's current valuation is around the 700-730K range.

The reason for investing there was due the amount of government infrastructure being invested there from the commonwealth games, extension to Helensvale station for heavy rail to Brisbane. South-port and it's immediately surrounds is slowly becoming gentrified and currently has 5/13 light rail stops. I would recommend buying a development block on 500-700sqm RD5 or RD4 block if your planning for a 5 year+ strategy. Townhouse developments will be the way to go moving forwards in the GC due to the potential for 1000s of apartments in PDA zones.

I purchased a second block in Brisbane City Council in Acacia Ridge in August. The site can built 6 2 bedroom walk ups or 4 townhouses on a 650sqm LMR(low to medium resi) block. Purchased at 397K, recently sales are all north of 400K in Acacia Ridge, even without multi-dev potential. Had a 70 day settlement on this one and only settled recently.

The reason I bought there is because it is the cheapest LMR blocks in Brisbane City Council and the homes are all solidly built ex-housing commission post war homes. Perfect to land-bank for a few years and tear down in the future. At about 14km from Brisbane CBD and within 5-10 mins drive to Sunnybank hills, Sunnybank and other chinese suburbs, it seemed to be quite a safe buy and hold strategy.

Another safe bet is to buy 600sqm+ blocks to landbank for larger family homes in chinese suburbs. Sunnybank Hills would probably be my pick, especially if you can get 650sqm+ for under 500K with a neutral yield on 80% LVR. Unlike Sydney, which has the chinese community spread out around the hubs of Campsie, Ashfield, Eastwood, Burwood, Chatswood and Hurstville, the chinese in Brisbane is all around the McGregor, Sunnybank surrounds and is very centralised. I expect this to continue as the Brisbane chinese population grows and knock-down rebuild land will be in demand.

Just my opinions

 

You should read this thread

VIC - Melbourne Rezoned - ACZs, NEICs, RGZs GRZs etc

And look to acquire a growth zone site. @melbournian had acquired one for me in melbourne and I personally have seen quite substantial gains

 

We recently got a high density zoned house in springwood Brisbane for low 600Ks. my inlaw brought the one next to ours. Together we can build roughly 35 to 40 two bedder units on it. Still plenty bargain to be had with the short term over supply in Brissy IMHO. Note that I am taking thr counter cycle approach so it might take a while.

 

Thank you for your inputs, I hope some more options will follow from other members.

I will soon roll up my sleeves and start serious research.

If someone can recommend some GENUINE and knowledgeable buyers' agent in these areas, please recommend.

Cheers.

 

If you have a 5 year timeframe, some very good opportunities in Brisbane's inner and middle rings. If you spend 3 months to do your research you will know what and where to buy.

 

We used BA for some of our other IPs. But for properties with development protentials its gets expensive and difficult to source by BA. They charge a lot more for it. So i did it myself. The best way is to review the latest zoning for the areas that you are interested. Those info should be freely available.

 

Bear in mind even the best BAs are a bit of hit and miss. The good ones get busy really quickly, this would make them more rush and complacent. Our first IP source from BA was great but the second one is no so good. I rather control my own distiny then someone else does.

 

That's a very interesting move, was it mainly the strategic value of amalgamating the two sites that drove the decision?

I was looking for those sites where you could build up to 32m in height, however I found it hard to justify land banking them due to the holding costs and the quality of tenants. The area looks like it might need about 10 more years for land-banking before it's ripe for gentrification and re-development.

 

Real estate is a long term game so 10 years are ok for me. Btw I am still young in my mid 30s so I have the time to wait. I am getting rental return from to it is not too bad to hold. those site can demand a huge premium when times are good so its justifies the small premium that I was paying.

 

yes amalgamating the two sites was the idea.