QLD Sunshine Coast - buy now to live in later?

Hi all

I've been reading this forum for a long time but now I need some advice from the community.

I am considering buying on the Sunshine Coast. Budget around 400-450k max, beach side - like walking distance from the beach but not sea views. I have seen some interesting villa units with a decent yield and low outgoings - Coolum and mount Coolum are looking pretty good. Houses are too much of a $ stretch from what I have seen.

The goal is to rent it out for 6-10 years and then use it as ppor. I'm doing the FIRE thing and plan to stop working by then, or run a business from home. I don't want something too big or high maintenance, and preferably a place I can Airbnb as I plan to spend some time overseas too.

Sunshine Coast is not set in stone, but it seems to be a good compromise between lifestyle, price, yield, and services available (hospital, 2 airports, etc). I know is it's difficult to combine a good investment and a "lifestyle" property...

The other option is to do nothing, continue to invest my free cash flow in active and passive managed funds, and re-consider the problem in 5-6 years. I've crunched the numbers and unless unit prices rise by over 5%/yr it's probably the best option. My thinking about buying soon is also driven by FOMO - with the activity there (new runway, CBD), the risk is that properties close to the beach could become too unaffordable.

Any thoughts, and flaws in my thinking?

 

It's very hard to see such a property appreciating at > 5% pa. So if you buy now, in 10+ years you may well have a tired property worn out from Air BNB tenants that needs a full renovation inside, and probably external work as well given how the sea air damages buildings.

Why not invest your money elsewhere and buy a shiny new one when you want to move in?

I don't know much about Air BNB but suspect it demands a high level of owner attention, which might be difficult if you are o/s.

There are exceptions, but I just don't see that class of property as being a particularly good investment.

 

Hello,
Take my input with a grain of salt, but your plans were/are similar to mine. I have approx. 6 year timeline till I'd like to move to the Sunshine Coast as I live/work in western QLD. At the end of last year, after much deliberation, crunching speculative numbers, considering purchasing shares instead of a house on the coast etc. I bought an investment house within close walking distance to the beach (approx. 800m), parks, shops etc. If the house grows in value 3% each year over 6 years, then it will be equal to the same value of a diversified portfolio of shares that I could've purchased. But I chose to purchase the property as it is getting increasingly difficult to find land near the beach and this secured my patch. I rent it out to a tenant who has been there for 4 years and I regularly look forward to moving there, making changes and making it home. I also figured that in 6 years I will have paid off the mortgage and can then throw money that would normally have gone to the mortgage into shares- win-win. Secure the property and buy shares later. Cant read a crystal ball but with the way things are going I dont think it would be hard to get 3% CG on the coast near the beach. It has had a good run though so when I look back in 6 years I may wish that I purchased shares. I would say to try and get a house with some land component and you will probably be more likely to get the return you're looking for. I bought an old beach shack on just under 600m but I dont care. Shares need to return quite a bit higher than property to win because of leverage and who says shares wont decrease in value for a few years right when you want the money? I think if you invest consistently and diligently, whether that be in shares or property, you should have a good outcome.

 

Thanks for the insights. Sunnycoast it seems we have similar goals. Do you mind me asking where you have purchased?

@Jockosaurus when you say this type of property is not a good class of investment, do your refer to units in particular? My idea of Airbnb is only for when I make it my PPOR and leave for extended times. Before that, I would rent it out with a regular lease.

I am not sure how you view units tho. Houses are out of reach for this budget / criteria (perhaps a duplex). I always thought units weren't too bad as apartment as they have low outgoings, and the land component is relatively good (especially small complexes of 3-4, which have garden etc. Much bigger land than a townhouse)

 

A unit needs something special to be a good investment and this doesn't seem to have it. If you can get one with ocean views, low BC, not on main road, small block of no more than 6, and <500 metres to the beach then it's worth considering. They do exist.

 

I bought in the Caloundra area. Check out the recent article I pasted below. It seems to suggest closer to the new Marpochydore city being best for investing but the Aura project in South Caloundra is being developed which should be beneficial for the southern end of the coast too. Aura is a hole in my opinion. Tiny blocks and small streets. If you buy on the coast then get a house as close to the beach that you can afford or would like to pay imo.

Five Cities Tipped for Property Investment Growth