QLD Thoughts on Zillmere QLD 4034

Hello,
We are new to the group. First time posters and first time investors, so please be gentle - thank you

We (my partner & i) are current looking at purchasing an investment property (house & land package) in Zillmere QLD for approx 950-1m all inclusive.
Land size: 550-600m2,
house: 4bed/2bath/study/2lug.

Our plan is to hold this property for min 15 to 20 years until retirement.

We’ve done some preliminary numbers (not advance excel stuff) and they seem to stack up. Also from what I’ve read, the suburb seems to have decent capital growth over the past few years with more amenities and infrastructure planned for the future.

We have also done some research on rental income and believe we should be able to rent the house for min $550-$600 a week.

Just wondering if anyone has any advise for us since we have no experience whatsoever with an investment property.

A bit about us, we are in our early 40’s, on a 200-220k combined income. We own a unit in Sydney (that we live in) estimated to be around $1.1-1.2m which is fully paid off.
We have 250k combined in shares and cash. No kids and don’t intend having any.

any advise on:
do’s & dont’s
pros & cons
what we should be looking out for
how to navigate the build

And any other helpful advice is most appreciated.

Thank you everyone in advance for your time and advice

 

Mate.. I am not an expert but I stay close to zillmere. I personally won't invest 1 mil in Zillmere. Checkout Carseldine, Aspley or Chermside they are much better suburbs which are closer to Zillmere.

 

2 things to consider immediately:

1. There is some susceptibility to flooding so be careful the land doesn't fall in that; and

2. Zillmere has a high proportion of social housing and crime. Generally speaking, the good and bad sides of Zillmere are split by the railway with the Southern side being preferred and nearer Aspley/Geebung.

Zillmere is a suburb which is and will continue to gentrify, so the latter is something to not he overly concerned about in the long-term imo. In the short-term vacancy should also be manageable given the demand for rentals. Just may be tougher in the coming years when pressure eases depending on where exactly in Zillmere it is.

There's some also pretty average post-wars which are close to reaching the 500s in rent at this point, so for a new build which isn't in a terrible spot, I'd be hoping for over $650.

Also echoing Brad's thoughts above, it's worth exploring the surrounds. You won't get new H&L if that's whst you're after, but you can get something decent in say Geebung or Chermside West for the high 7s, low 8s and touch it up really nice for not too much.

 

These were options a few months ago, but no longer possible. Especially 600m2 sites, which in Zillmere are probably worth 650k.

corner of cowie and beams in carseldine has 400m2 blocks selling off the plan for mid 5’s. Banyo has 400m2 blocks selling for 650k

you may find something established in Chermside west or geebung for 7/8, but only on 400m2.

Zillmere used to be a legit no-go zone. Now it’s has gentrified rapidly, and is full of first home buyers who bought when a 600m2 ex housing commission house was 500k and all they could afford.

 

Good work on asking the question on here before buying. My first thought is that you should stop and do a little more research. Listen to the first 20 episodes of the property couch podcast as quickly as you can then reassess. Many many people advocate for buying established properties on larger pieces of land (600sqm+) as it’s the land that appreciates. You want a high land to asset value. Most buildings will depreciated over time and won’t be shiny / new in 10 years time. Personally I would not touch a new house and land package.

 

I think it can be done, although don't know which builder you'd pick as some of their output look truly cheap and nasty if you are trying to cut corners etc.
These are far enough away from the crime hotspot areas in my opinion:
https://www.realestate.com.au/property-residential+land-qld-zillmere-203123954
https://www.realestate.com.au/property-residential+land-qld-zillmere-203077734
https://www.realestate.com.au/property-residential+land-qld-zillmere-202997870

There are also those 'ready built' ones nearby, outside Geebung Station.

 

I think you can do a lot better than spending $1 million in Zillmere.

Chermside West, Aspley, Arana Hills, Ferny Hills etc...

Have a play around with the QPS crime map and you can see the difference.

 

For Zillmere I wouldn't be going for that pricing/market... Somebody was shot there the other night, so still some dodgy aspects.

I think the suburb will do fine in the longer term as things spread out, but I'd be looking more at the $600k liveable existing house on largest land, then just renting out and waiting. If the area does gentrify nicely, then consider a KDR then.

 

House and land packages are the second worst performing real estate asset class closely behind new apartments.

 

Hi Brad - thank you! Will have a look at the suburbs above.

 

Oh dear - that is really off-putting

 

You don’t need to be put off from investing. Just spend a bit of money on a reputable buyer’s agent and you will likely buy well and do really well over the long term. Have a search on here for recommendations. Your budget is great and you could buy an excellent property. As I said before, I would recommend listening to a few podcasts especially the property couch to get a good base understanding. Or you can get their book for free if you pay for shipping - The Armchair Guide to Property Investing | Free Best Seller Book

 

Hi Mark, thanks for the Podcast tip! Will do. Land is 560m2+ so very close to 600.
Interesting comment on H&L package. May I ask what your reasoning behind this is? Thanks again for the tips

 

I'd imagine these would rent out fairly easily
https://www.realestate.com.au/property-house-qld-geebung-137536774
https://www.realestate.com.au/property-house-qld-zillmere-137529234

 

While it'd likely have no issue renting, I'd probably steer clear of the Geebung one. That's a pretty new build on a recent splitter which is really narrow. Little scope to add value in the short or long-term and the land won't appreciate that much given it's shape and size.

Zillmere one is a good block of land, albeit not the most convenient shape (but not too bad either). I've personally never been a huge fan of renovating post-war cottages, but it's nice enough inside. Right side of Zillmere too. I think this one would do fine in the long-term and get a decent enough yield, depending on how much it goes for at the auction.

Also it has a really strange shower/sink placement in one of the bathrooms:

 

You’ll get the answers on the podcast…. ;-)

Land generally goes up in value
Buildings generally go down in value

When you get a new house and land package you generally spend a lot more on the building than the land. When you buy an established house in a good location the land value is a much higher % of the total amount paid = more growth. Plus you can manufacture further growth in the future via renovations etc.

 

Thanks Mark202 for sharing your knowledge about the podcasts and free book

 

I would also agree that 1m all in is too high an investment for Zillmere at this stage.

You might be able to squeeze in to Stafford Heights, Stafford or Everton Park or nearby Geebung (ideally near the station).

If you’re wanting to limit your investment to 1m, would you consider seeking out a large block (810+), applying for subdivision and then selling?

A large block in Stafford Heights (just off Appleby/Wilgarning) recently sold for 803000 in May, they subdivided and sold one lot for $610000 (410sqm) in August. You might then be able to score an ugly duckling in one of the aforementioned gentrifying suburbs where the low buy-in properties are there and the $1.5m+ new builds are popping up rapidly. Stafford Heights/Stafford & Virginia are my picks for these golden egg suburbs.

I’d also second the advice against house and land package. Developer cuts are factored in (obviously - they’re running a business!). Better purchasing an ugly duckling and putting on a low spec okay looking home these days. My last two developments were with Bold Living and we had them come in around $400k and they had good feedback from the market). People are paying an absolute premium for these builds.

 

The internet is a funny place. OP has come here looking for advice on the simplest investment option he can find (house and land) and now people are telling them to become a developer.

It's not bad advice, but really it's different strokes for different folks.

Two other comments. BOLD are amazing and excellent value, also that splitter in Kingaroy St was an off market special in a boom market so will never be repeated unless you are in the biz.

 

Point taken. I guess I have a particular perspective.

With that in mind - try Geebung (near station) or Aspley.