thoughts on 1 bedders as investments (within Brisbane CBD or within 3km of CBD)

Any thoughts on 1 bedders (in general) as investments in Brisbane?
you can pick them up with good yield within the CBD, or slightly further out of CBD (like a few km of CBD) that are slightly larger. Looking around the $400k (including carspace and study nook) ... in the CBD they are around 50-55m2 internally + balcony, within a few km of the CBD they are larger, like around 60m2 internally + balcony.

I asked one of my property managers who manages a property in Bulimba - says they rent quite easily round $430/week, took about 3 weeks to find a tenant.

Asked another of my property manager who manages a property in Auchenflower - says to avoid as professionals like an extra room for guests, storage, or a study.

 

A building is under construction that'll have 1000 apartments in it. What will your comparative advantage be?

 

I hear there is an over supply of units in Brisbane CBD. You might get a good yield but strata cost can eat that up. If there's a over supply might not be much CG.

 

I have recently just rented a one bedder in Brisbane and I can say a lot of places are offering discounts on rent especially around the Hamilton area. Had multiple places dropping rent from 420 to 400 even at 380 and these are brand new places.

 

As you are in Brisbane have a quick look at the rapidly changing skyline and I think you will have your answer.
Yields are likely to drop for these along with increasing vacancy rates.
Other than students does anyone like 1 bedroom apartments in Brisbane? 2 bedrooms would be prefered. I stick to houses there personally.
About the only thing going for these is their affordability but finding a tenant in about 12-18 months might not be so easy.

 

DO NOT DO IT.

 

Don't do it. Go check out what has happened in Darwin, Perth and what is unfolding in Melbourne and soon to be Sydney.

Thé risk/reward doesn't add up when you can get houses near train lines for similar prices.

Alarm bells are sounding...

 

Lots of supply currently and to be built as well. 1 bedders will also appeal to a more limited market. If you must go for 1 bedders, look for older and often larger ones without the trappings eg pool, gym etc..this should lower the body corporate fees a bit. And seek ones that have some differentiation amongst the others. Eg character, location etc. Ask why that and not others.

 

Thanks.

 

Apartments come with strata fees...did you include strata in your calculations? That would make your good yield to ordinary yield. Can you add value to it? Every other units will be screaming put for tenants when newer apartments appear. What does your 1 bedder have that others don't? Dig deeper and you will agree with the assessment of the experienced investors before us.

 

I'd stay out of the cbd for all the rreasons above. Really need to find a small complex with low body corps or they kill cash flow - as per JDP1's comments.

 

Oversupply will be a big issue
Lack of capital growth is another
$400k can be spent elsewhere in Brisbane/SEQ with just as good a yield and none of the 2 issues mentioned.

 

A friend bought an OTP 1 bedder in Brisbane in a mega tower with all the no-no (pool/gym/etc). He really thinks OTP can be a good investment, I told him not to but he didn't listen. I told him if it must be OTP then go for boutique (small) complex in the suburbs, no gym, no pool, didn't listen. I hope the future won't be as black as many are predicting otherwise he will be in real trouble...

Those salespeople can really get in your head.. All the arguments in the world did not suffice for deterring him from buying... Buyer beware...

 

Yes that's true, especially if the sales people got some backing data from independent source.

 

There's areas like new farm with more limited sites to bring new supply on the market and lots of walk up 1 bedders. Rental market is always strong here, but entry prices higher than most other inner suburbs.

 

That's a pretty resounding series of "no". Here's mine too.

 

Disaster averted. I'm glad you asked, @Danielt25

 

I just cant believe my friend bought an apartment Brisbane CBD in June... Driving reason for the purchase? The "tax benefits". I hope she doesn't have any problems later down the track....

 

..and you didn't advise your friend otherwise?... What kind of a friend are you? Lol..

 

She went ahead before telling me! Unbelievable!