Thoughts on IPs in Drayton (4350) in QLD (Toowoomba Region)

Hello all,

I've been looking at buying an IP just outside of Toowoomba in the Drayton area. I'm a Sydney investor and my Toowoomba IPs have done well when it comes to rental yields. I've been lucky with tenants historically, but that's maybe because I'm near the CBD.

Now, I've always bought and rented my IPs, but this time I want to try something different like buying acreage and subdividing, or even buying and building duplexes (I've always bought existing and established properties).

I've been looking at Drayton of late, and it has always caught my eye for some reason, being just outside of Toowoomba. I really want to jump in and start my new project, but I can't find any suburb reviews or get traction on what type of area it is to live or invest in.

I can see a heap of House and Land packages being advertised for the area as well as vacant blocks, but I was wondering if anyone has any info, advice, suggestions, etc they can feed me about the area as to whether I should avoid it or go for it.

Cheers in advance.
Elbowz

 

Honestly, I think there are better deals to be had in other areas of Toowoomba and out around Highfields.

I just went out there to look at a house with my SIL the other weekend (she was looking for a relative that lives down Sydney way who is after an investment). I know the area fairly well, as I have investments and live in the Toowoomba region myself.
The houses out there would be decent investments, if they were in a capital city like Canberra or Sydney. But for Toowoomba area, they are small and squished together. The bedrooms are tiny, really onky fit for single beds in the secondary bedrooms, and a queen would be filling the space in the master bedroom - similar to a lot of the entry level new builds I have seen in Canberra. The only thing they have going for them is that they are new, and have shiny appliances.
They are also what locals would consider reasonably far from the main shopping areas, and public transport out here is not like in Sydney.

Add to this, the rental returns on it are not fabulous. And capital gains is likely to remain low and a long way down the track, especially on these new builds which are selling for a premium.

There was absolutely nothing there that appealed to me as an investor. I would not invest in one of these new builds in that area.
If you specifically want a new build, think about heading out Highfields / Kleinton/ Cabalah way. It can be harder to guage the prices in this area, because they can vary and range greatly depending on exactly where they are located. But it is, IMHO, a much better area altogether.

Having said that, I personally feel that there is a lot more money to be had in duplexes and triplexes in Toowoomba, then in idividual houses. There are often quite a number of duplexes and triplexes for sale around, that bring in decent income. The main issue is that they are often older buidings, so you need to be prepared to either renovate (which is what we chose to do, and of course it increased our rental income too - but its easy to overcapitalise just bringing an old place up to modern standards) or factor in the higher maintenance costs.
Alternatively, buying a block of land and building a duplex would likely be a good investment.

I really reccomend actually making a trip to Toowoomba and having a look around and getting a feel for the place, if you are serious about wanting to invest here. It is really just an overgrown country town that fancies itself to be a city. And like most regional towns, one side of the street can be a 'good' area, whilst the other side of the street may be considerable less desirable.

 

Brilliant summary Rugrat, and thank you so much for taking the time out of your day to go into detail. It's greatly appreciated.

I've done a few trips to Toowoomba, and the last was for a property in Kearneys Spring which had multiple income streams. That one's done well so far, and with it being 4km out of the CBD, I started to look out a little more, hence Drayton caught my eye.

Cheers again.
Elbowz

 

Yep, Kearneys Spring is an area I would think is a good place to invest.

I also like Wilsonton are for investment. Which goes against what some of the locals I have talked to think. It is an older cheaper area, so has a reputation as a lower class area, and I personally would never send my kids to the schools there. But as an investment, its cheap to buy into, has decent sized blocks, is easy to get tenants in and has good rental returns. Those who cannot afford to live in the nicer areas still have to live somewhere.