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Tips and yield for first time investor in Brisbane.

Discussion in 'General Property Chat' started by Brian84, 1st Jan, 2016.

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  1. Brian84

    Brian84 Well-Known Member

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    Hi everyone,

    I am heading to Brisbane on 16th -22nd jan for holidays and to check out some areas around Brisbane. Just wondering if any one had some tips for a first time investor and also what is the average yield that people are achieving without doing any work to a property.

    I will probably have a budget of around $350k hopefully.
     
  2. MsAli

    MsAli Well-Known Member Premium Member

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    @Brian84 - depends where you are looking?

    In that budget you could get a house in the North and achieve 5.5% return or something in the south for 6%-7% return. 7% is much harder now given the market has moved. Also depends if you are willing to compromise on how well placed the property is. Convenience has a price and therefore capital growth and hence potentially lower return. While if you don't care about location as much you could get a dual living house with the return anywhere in Logan.

    Also, I personally believe, Logan has a lot of junk houses so you need to choose carefully on what you end up buying. At least compared to Western Sydney, there was a lot of rubbish we had to sift through and took a while for the deal to click.

    A lot of properties don't come on the market and get sold before hand either to BA's or to seasoned investors who build good rapport with the agents.
     
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  3. bob shovel

    bob shovel Well-Known Member

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    Have you checked out re.com.au the investor section? Look at the maps and suss out the yields for different areas, and pairing up with you price range
     
  4. tavinium

    tavinium Well-Known Member

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    Also careful of those 'pop up' suburbs in the outer areas. Still heaps of land yet to release. A not so ideal location, good quality build in an established suburb I think would be better than a new or developing suburb.
     
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  5. Brian84

    Brian84 Well-Known Member

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    Thanks for the reply msali.

    I don't really get a good vibe about Logan. I know a lot of people rave about it but I don't think I would buy there unless it was a great deal.

    I would be looking for something that will cost little to nothing to hold per week.

    Yes bob I have done that search on real estate.com but wasn't sure how old or accurate it was.

    Tavinium I wasn't really looking to build or renovate at the moment. I am looking for something that pays for itself for a couple of years.
     
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  6. jins13

    jins13 Well-Known Member

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    Good luck Brian, hope you get something good. I am over renovations atm too and probably wouldn't do any for a while.
     
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  7. Brian84

    Brian84 Well-Known Member

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    I do carpentry for my day job so that doesn't bother me. I just want something that will look after itself to start with. I just need to get into investing first before I do renos or developing.
     
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  8. bob shovel

    bob shovel Well-Known Member

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    There is a bit of lag but use it to target some areas then do tie own search and study the rental market
     
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  9. wylie

    wylie Moderator Staff Member

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    You could get a 60's brick, solid "six pack" style two bed, one bathroom unit in Coorparoo, Holland Park, Greenslopes for that money. Would rent for about $350. Easy to rent, hard to damage.
     
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  10. bob shovel

    bob shovel Well-Known Member

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    You know you could go out and develop straight up if you have the job stability and funds/loan available. That's what id do. Make some profit and end up with a brand new joint or two for a long term hold with minimal worries!
     
  11. Brian84

    Brian84 Well-Known Member

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    I'm not in the position to to do developments or my own renovation projects at the moment, especially not in another state. I will eventually.
     
  12. Bran

    Bran Well-Known Member

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    Capital growth oriented HOUSE inner/mid ring 5% tops on south side. Generally not positive, but depends on your goal. Definitely out of your price range though - you might squeeze into something in Acacia Ridge

    I can't see staggering growth in units at the moment and I'm steering clear. A property manager on the north side was telling me yesterday about her 40 unit complex of 2-bedders, and she is unable to rent a single one of them.
     
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  13. Biz

    Biz Well-Known Member

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    If you are going in a couple of weeks you should already have a good idea of where to buy.

    So what areas have you got in mind?
     
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  14. MsAli

    MsAli Well-Known Member Premium Member

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    Hi wylie...does the over supply in Brissy impact these units in this area? What price bracket are we looking at and what sort of condition?

    Do you see capital growth for these?
     
  15. bob shovel

    bob shovel Well-Known Member

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    ;) post caught my eye too

     
  16. CosmicTrevor

    CosmicTrevor Well-Known Member

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    Brian, the key thing for me is that you ask what yield expectations you have without doing any work. I would think this means a near new property (say 2-5 years) on a well kept block or possibly a townhouse / unit depending on your views on these. For your budget I think you will have to look a fair way out for a house. I agree with Bran that a maximum of 5% for a house is about right. For a unit you could achieve 5.5-6.0% and perhaps another 0.5-1.0% if you furnish it. Having said this the potential for stronger CG is with a well located house - but you have to pick well!

    Wylie's suggestion about a 2B/1B walk up is worth looking at as well, just make sure you carefully examine the BC minutes and look for a block that is being well managed to fit your "no work" criteria.

    Bran, it is concerning that a 40 unit complex on the North side isn't renting well, there could be many reasons for this, probably what is being experienced is the increase in supply in the inner North which is attracting tenants out of older properties or properties in less desirable areas. I track the unit market carefully in the inner North and I have a sound understanding of what rents all the largish apartment buildings are achieving. For the complex you mention I suspect the pricing needs to be looked at if it is older or in a less attractive area.

    I do invest in apartments with the full understanding that the CG potential is weaker, the easiest way to rationalise this is that by definition if you are buying a unit you are buying someone's improvement to a parcel of land - thus the CG potential has already been reaped to a certain extent. This is not to say that CG won't be achieved with units, however, you have to pick carefully and stay clear of generic dog boxes in large apartment buildings with expensive facilities.

    Good luck
    Trev
     
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  17. willair

    willair Well-Known Member Premium Member

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  18. bob shovel

    bob shovel Well-Known Member

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    I'd think he means ready to rent not necessarily new. To get an idea of yields then improve if he chooses
     
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  19. Brian84

    Brian84 Well-Known Member

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    That's exactly right bob. Not looking for anything new.
     
  20. Brian84

    Brian84 Well-Known Member

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    I was looking at crestmead, marsden, Kingston, deception bay