QLD Toowong or Nundah, Brisbane?

@Gockie Completely understand. The reason why I was looking at OTP is because I need around 1-2 years to save up for the rest of the deposit.

@radson Wow that's fantastic! Had a look around and everything is just over $700k now

@rico2011 Here's one I did for a 1bedder in Toowong



And for a 2 bedder in Nundah

 

Hi Erlina, how much deposit do you have now?

Generally speaking its better to do an 88% lend sooner if you have little deposit (and need to save for it) rather than a full 20% in your case to help you into the market sooner. If you are nearly able to afford the 12% down then I'd do that rather than OTP.
Btw there are some forumites who might be able to help with getting loans larger than 88%. Without costing an arm and a leg is the challenge here, but maybe another forumite may be able to help.

Yes there's LMI but in a rising market you are better to pay LMI and get in sooner. Plus you can claim it on your taxes over 5 years. Please read the forum and be wary of the potential pitfalls with OTP. I think you are not so likely to see capital gains on OTP units either in the first 5 years, sorry.
If you still want to proceed then do so by all means, I just want you to read what has been posted by forumites before proceeding.

Ps. I see you have put in depreciation as a negative 10k per year. If its included in the feasibility i'd put it in a positive rather than a negative and at your marginal tax rate (32 or 37%?) for the purposes of cashflow calculating. Note the depreciation will be higher the first couple of years and lower later on... note i'm not a depreciator and this is general advice.

 

@Gockie I have around $150k in my offset account but I can only afford to withdraw $50k at the moment (various reasons) and so hoping to save up an additional $50k over 1-2 years

 

Quick question... I see you are from Sydney and potentially have a PPOR as you have an offset account. Do you have equity in your PPOR you could possibly use?
And... I reckon 50k can possibly assist in a 350k purchase or so.... which buys a house in Logan.

 

@Gockie I just did a refinance on that ppor, that's where the $150k is from

 

(Below is based on your one bedder)

I do my numbers on 100% lend for the interest, if you put enough deposit in eventually you can get it looking good (remember you need your 88.4k deposit working for you too), I think yours is about 8k negative p/a before tax benefits and depreciation if borrowing 100%. I'd want to allow for vacancy too, reports are at the moment landlords having to offer incentives to get tenants in the inner city area's in Brisbane, how will that be in 12-24 months with lots more units coming online? So if your vacant for 4 weeks in the first 12 months there is another $1640 negative. Don't forget your letting fee too, usually one weeks rent

Here is my cash flow numbers on a recent house purchase in Logan (August 2015) based in a 100% lend (It's about 7.7% gross yield after a basic renovation/makeover):

Positive Cash Flow.
$20.78 / Week
$41.55 / Fortnight
$90.03 / Month
$1,080.40 / Year

I'm no expert but if we go through a period of low growth I'd prefer a neutral cash flow rather than 8k negative. As a pure investment I'd struggle with what you are looking at especially with the predicted over supply coming in the Brisbane market for units. I'd be trying to buy an existing unit under current market value rather than off the plan where your most likely paying premium, provided you can get a loan now. All depends on your income and how many properties you are planning on accumulating good luck anyway.

 

7% increase per year might be a bit optimistic for OTP.
2-wongs don't make a wight.

 

My opinion is that Toowong is more desirable as a suburb than Nundah

 

Yep i agree. And the entry prices of toowong vs nundah reflect that

 

Please google "Brisbane inner city apartment over supply 2014/2015" and read articles submitted by credible researchers
Here is a recent article by our property researcher, Mr Terry Ryder:
Better in the bank than on Brisbane inner-city apartments: Terry Ryder

http://www.hotspotting.com.au/news/1/apartment-oversupply-looming.html

http://www.hotspotting.com.au/news/1/oversupply-coming-for-brisbane-units.html

Professor of QUT's comments below:
https://www.qut.edu.au/science-engineering/about/news/news?news-id=85924

http://www.brisbanetimes.com.au/que...ents-to-flood-the-market-20150628-gi00c5.html

RBA discusses oversupply issue below:
http://www.businessinsider.com.au/the-rbas-warning-on-australias-apartment-boom-2015-10

 

Hi ,congrats for taking the first step . Please consider carefully as there are so many new developments happening . Properties in CBD are taking longer to rent out at lower than expected rents .My latest buy in CBD is negatively geared as couldn't rent out even after renovations etc. If you look at the available props and average visits per prop. you will realize the oversupply issues.
Good luck

 

Having said that likely nundah will show more cg in short and med terms but not in long term compared to toowong because of supply differnces and entry price differenes. Imo

 

I would buy in Nandah , however not for this amount . Do your DD and negotiate hard . You can do very well with that budget .

 

Hello @Shazi!
Welcome to the forum. We have a meetup at the Bent Elbow at Stones Corner on the 25th Jan... If you are in Brisbane, please come along! You'll find details are in the networking and meetups section.