St. Lucia, Brisbane, QLD

Discussion in 'Where to Buy' started by tony g, 29th Jan, 2018.

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  1. tony g

    tony g New Member

    Joined:
    28th Jan, 2018
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    Location:
    Brisbane
    Hi All,

    I love St. Lucia, UQ is beautiful, lots of public transport options, it's a beautiful and short commute to the city along the water.

    I've been considering investing there.

    I've been looking at 2 bedroom units and have found that with the asking price the yield is ~ 5.5%. I understand rents have dropped a bit lately and I need to be careful about guessing my rent.

    When I look at my cashflow,and factor in monthly p+i mortgage costs these properties typically end up negatively geared at around -2,000$ annually after subtracting body corporate and landlord insurance. This is before factoring maintenance. I'm typically looking at properties in the 300 to 500k range with rents from 350 to 500 per week.

    In order for these properties to be appealing to me as an investor...the numbers don't typically workout unless I have a significant reduction in the asking price of the unit, somewhere between 50 to 100k. Is this because investors in the area are happy to negatively gear and are focused on capital growth? Capital growth doesn't seem very impressive in the area either, more or less flat over 10 years. Am I missing something? Any help/guidance/recommendations would be greatly appreciated, any landlords out there?
     
  2. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    18th Jun, 2015
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    2,025
    Location:
    Brisbane
    A lot of unsophisticated investors (not like you who have done your homework) simply go UQ - never ending supply of students.
     
  3. tony g

    tony g New Member

    Joined:
    28th Jan, 2018
    Posts:
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    Location:
    Brisbane
    Thanks for the input RPI, as a new investor I appreciate hearing that "I've done my homework". It seems like there would be a number of landlords in St. Lucia that are tired of losing money on their investments I'm expecting a further downward trend of unit prices...just trying to figure out a strategy on how to get into the market and find landlords that are motivated to sell.

    I'm considering looking for a property that has not been remodeled, with a small number of units on the block (somewhere around 8), body corporate fees < 2,000/year if there's no pool/amenities, if there's a pool I'd be willing to pay more, potentially.

    I've been thinking about high body corporate as simply added risk (additional cost on top of vacancy). As an investor I'm thinking I'd prefer not to have a pool, elevator, etc. Obviously a pool might attract more tenants though.

    I'm thinking I'd like to buy something that students would be happy to rent. Over time increase the value, potentially increase rents and attract young professionals instead. I see more flexibility going this route as opposed to buying something really nice at a high price, which would require high rents and have limit flexibility to the downside.
     
  4. Blueskies

    Blueskies Well-Known Member

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    24th Aug, 2015
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    Location:
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    My sister just bought a unit there. She is based in Sydney so sent me unit shopping for her. It is not my preferred type of investment but I know better than to argue with her and I think you could do worse in other suburbs in the brisbane unit market at the moment.

    Ended up with a 2 bedder configured as two one bed units, purchase price was $390, total rent for both sides is $650. Body corporate is quite high but net yield after BC and management fees would be around 7%
     
  5. tony g

    tony g New Member

    Joined:
    28th Jan, 2018
    Posts:
    4
    Location:
    Brisbane
    Thanks Blueskies, nice to know that 7% is achievable
     
  6. Sackie

    Sackie Well-Known Member

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    Location:
    Vaucluse, Sydney.
    Sisters are a pain aren't they..o_O:D
     
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