QLD Thoughts on Dual key home at marsden

Do we have anyone who dealt with this guys

http://www.aushomes.com.au/invest-in-aushomes/

http://www.realestate.com.au/property-house-qld-marsden-120111013

I was looking at Dual Key home around marsden QLD

 

I haven't death with them, but i have been looking at dual occupancy in Marsden. Most have not yet started construction.

Logan only just started to allow a 70m^2 unit to be attached to basically any house and rented individually.

There are a number of places in Marsden where these are going in, usually to blocks around 450sqm.

From what I can tell, the blocks can be had for $185k, and the build for $250k. The build is more expensive than a single house of the combined size because the dividing wall is a fire barrier.

So you can push purchase price down towards $430k. Most are marketed at $450k upwards. Some re-sellers are asking $550k....

I would think the rent be from $200+$300 (1/1/1 +3/2/1) to $250+$350 (2/1/1+4/2/1) per week. Should not be a problem renting, as there are lots of townhouses and units in Logan area that you can steal tenants from, as these are far more spacious and newer. A good guide would be to compare it via townhouse plus unit rent = total rent.

Some are claiming $280+$390 per week, which I find hard to believe unless it's a generous size block with large outdoor areas. Most of them don't have the duplex feel because they are crammed in, so its hard to get higher rents that individual new houses get.

My biggest concern is that Logan is going to be flooded with these setups. Now that any house in suburban precinct can have a unit, I'd think that a huge portion of all new housing will now be dual occupancy (auxillary unit). The council is doing it specifically to drive down rent (bad news for owners of town houses and high density units!).

This means it might be better to buy where only one block is being developed, rather than the whole street. A street of these dual houses is really unappealing, as its basically only 6m/7m frontage for each dwelling, and looks congested busy and noisy and will turn away anyone who wants to rent a 'house'.

Most builders now have these dual occupancy designs. So no need to go to some dual occupancy sales group. Even Dixon homes does them.

Also remember that you can't sell each one individually.

Personally i think the numbers stack up. $450k spent four $550 rent is better than $400k for $400 rent that a normal house is. How ever there is two lots of everything to maintain.

 

This one looks to good to be true:

https://m.realestate.com.au/property-house-qld-kingston-119938721

Only $368k and could earn $530/wk rent.

 

It's possible in Logan. I have a house I bought at 320k and it earns $530/wk rent.
It's a 3 bed and 2 bed setup though. All legal.

 

I see a lot of properties that don't have dual occupancy approval. Renovated older houses almost never have it, as they don't have the fire separation wall required.

 

I'm just wondering how easy was it to rent out a 3 bedroom house in Logan? I've heard there's more demand for 4 bedroom houses from Michael_X and I'm still tossing up between which property to go for. Any advice would be appreciated.

Thanks

 

Huge tenant market in Logan, but you need to be careful as the ratio of "professional tenants" are quite high. Just need to ensure you do proper background checks

4 bed houses rent well and if there is a separate living space, even better. There is a huge demographic of certain ethnicity which are accustomed to living together in big families like Islanders. In my experience, any decent 4 - 5 bed highset with separate living area gets tenanted very quickly if priced well - legal height or not.

 

Recently heard from a client, he rented his property out in Woodridge for $600 per week - a suburb record according to the PM.

Three applications on the first viewing, so the demand is there

Cheers,
Michael

 

the idea of dual occupancy is good
but am i the only one that thinks those designs are rubbish?

1) why is it 4 bedroom and 1 bedroom - there might be demand for some 1 bedroom but marsden seems to be a place where it seems you would need 2 beds atleast.

2) i would imagine it would be nicer to have a duplex style - maybe 3/2/1 (90m2) on one side and 2/1/1 (70m2) - its about the same size as dual living property mentioned and would not be suprised to see 600 per week rent

though i have a feeling these properties are designed for owner occupiers to take the 4 bedder and rent out the the 1 bedder to cover some of the mortgage

 

1) Conversion of downstairs on a highset into a self contained living space is relatively easy and cost effective. Some remove the garage completely to add extra bedrooms and those who don't will keep it as a 1 bedder downstairs. As mentioned before, there are a lot of certain ethnic groups that like to live together under the one roof. In saying that, the family member that lives downstairs will often chip in to pay for overall rent on the property.

2) As it stands, it doesn't really make financial sense (yet) to outlay the capital and build a proper 70m2 unit in Logan. Not for a a bit of extra rent anyway. Properties with this potential are also selling at a premium in the current market.

 

simon l - i was reffering to the new ones built in marsden from the op

in terms of your 2) point i cant see how its not worth 80-90k to recieve around 250 rent per week

personally i feel more comfortable doing that than building under and doing dual occ that way. Legally building under would not be legally allowed to be rented out on a separate lease unless it was fire rated (i cant see that being cheap).

though for max rental return would be rent out the highset as dual living (around 450pw in logan) on one leasse and rent out the auxilary unit separately?

 

Remember, capital gain is what will make you money - rental income is simply there to help you hold a property until that happens.

Your $80 - $90k build will take around 340 weeks to break even (assuming no vacancies and added costs) for an extra $250pw rent. In the current market, you can almost pick up another 2 properties with the $90k outlay - which do you think will be more profitable?

Legal Height is as rare as hens teeth in Logan and when they do come up, you will be paying a premium for it. The rental demand is there for non legal height properties under the one lease only. I am not suggesting you go after these as there are certain risks involved, but just make sure the numbers stack up with whatever you purchase.

 

I guess it depends on personal circumstances

though we cant tell yet - i have a feeling that 80-90k spent should be achievable upon sale of your property

eg purchase highset 320k with dual living renting at 450pw
add 80k granny flat add 250pw (maybe 280pw but rent the original house for 420pw)

shouldnt have any issues selling a property renting at 700pw for 400k (9% yield) plus capital gain that the area incurs

its getting late so dont blame me if i make no sense lol

 

Yeah you really have to crunch the numbers carefully. I think you can strata title dual occupancy and sell each one individually, I'd think it would get you a nice capital gain.

 

Wow! That's great to hear. I did speak to a few agents today and they were saying the properties in the Logan Central are turning over reasonably quickly, e.g. 4-5 days. Mostly investors from Sydney they were saying as well.

 

In terms of cost effectiveness, how much would you estimate it would cost to fit out the downstairs of highest home into a liveable space?

Also how does it work when renting out the property if you convert the downstairs portion and its not legal height? Are you only allowed to advertise the number of bedrooms which are to legal height upstairs?

 

Hello Fairy, i have used them twice now and haven't had any issues. I think they are more transparent than most operators, they are reasonably priced and their quality of work is good. Deb managed my projects and i found her to be excellent (i'd recommend her).

 

AUSHOMES are great. I work with them in managing their Duplexes as well as sales of their Duplexes. I have had a long term relationship with them and they have remained consistent in service and quality.

If anyone needs examples of completed products - let me know. If you want to see near completed or under construction properties when you are in Brisbane let me know.

In relation to questions about returns compared to older homes.
New builds provide you with all certificates and documentation.
New builds allow you maximum depreciation.
Dual key has additional benefits for investors because they can be let out separately, after the initial period, it is highly unlikely they will both be empty at the same time, thereby maintains cashflow.
Where do tenants come from? There are plenty of tenants. The two beds attract single parents, single households (later in life you really don't want to house share) and this is on the increase. Three beds attract smaller families that can't quite afford the four bed house prices and couples that need a guest room and office so fall out of the four bed market because those houses are too expensive and more to maintain...
Logan needs to increase the number of dwellings due to the growing population locally and from refugees.

Strata for capital release - you are able to strata these properties after it's been built. We have clients in Bahrs Scrub that have done this - purpose to refinance and extract equity. If you intend to keep them for cashflow - yes, the gross yields average 6.0 - 6.8% was higher but due to land prices going up, this has eaten into the overall yield.

 

To avoid any additional referral fees which are added onto the price, it always pays to go direct to Aushomes. I always go directly to Deb.

 

Hi Simon, why do you think its not worth doing a proper 70sq/m aux unit in Logan? I have a 760sq/m corner block in Loganlea I am considering it (or a proper dual occ)... I hear figures of 100k to build the 'granny flat' and I think it could rent around 250-270?