QLD Toowoomba?

Hey Barny,
I have spoken to 2 real estate agents and they say there has been 'some' movement picking up again during the summer months. I wouldn't say there's a lot of activity as we had seen in the recent past (2014/2015) but its stable and asking prices are still solid. I put in an offer for a cheapie in Newtown last month and there was multiple offers on that property. I didn't end up getting the deal though. Oh well..but I can sense there are families and first home buyers out there looking. Harder to find good properties under $300k now a days without the need to renovate....unless its located in Wilsonton/Rockville/Harlaxton area. For decent character homes you're looking at above $350k... they're relatively good safe buys here.

Where abouts is your property in Harristown? If its near the railway tracks like on Stephen St then it wouldn't be worth as much. Harristown is a bit underrated though given the proximity to the city but it doesn't have the good schools that do well and drive the property prices as compared to Centenary Heights (which is adjacent to Harristown). All the best with it...whatever you choose to do.

 

This whole thread has been fascinating. thanks everyone for sharing your experiences.

I have been looking into a Duplex build on a 650sqm block of land. 3K south of the city. Total build roughly 590k inc strata titleing. The sales person is suggesting there will be 85K equity after strata split?

Has anyone has any experience in new builds (especially duplexes) vs older homes and what market preference is? I see older, 3-4 BR homes for 350K on large blocks of land... wondering who would pay similar price for new build with smaller house and smaller backyard..

Cheers

 

Hi Guys, Just a quick note to add some insight to what i'm seeing from a tenant/rental property point of view.

Had a tenant break lease 1 month ago and the real estate put it on the rental market. Had heaps of enquiry as it is a large 5 bedroom home. One very positive factor is that the likely applicant who has been approved is are new employees of a restaurant chain opening in the new Grand Central.

The real estate says they have had a fair bit of enquiry from employees of the newly renovated Grand Central looking to rent in the area.

I'm taking this as a huge positive and we may see plenty more of this. Keep the hope, Toowoomba has great economic drivers and hopefully this is the start of something great.

 

Good to hear Mick. I've noticed rents have also risen a little since I last looked. My tenants have breached 3 times and decided to leave which worked out well as I want to sell. Putting the house back on the market after Easter. Toowoomba should do well long term, but I'm taking the cash and getting another in Melbourne as the market has been kicking ass as it has so much going for it. I reckon I could make more in Melbourne market in a year than waiting 5 years in Toowoomba.

 

Hi Barny, I agree the Melbourne market is looking good. Are you looking in the western Melbourne areas?

 

The new purchase will be a ppor in the north with acerage. I have 2 in the west (werribee)purchased a few years back on a lager block, subdivided and added one at the rear.
I would have kept Toowoomba longer term but i want to reduce my risk and put the funds into something that's growing, And I need a roof over my head which made the decision easier to justify. The houses I'm looking at have gone up 70-100k a year for the last 2-3 years and my Toowoomba house has gone backwards, and with the continued over development, it might drop more, not sure.

 

That' great! Would you say Wyndham Vale is still good buying? For me i have missed the rental return boat for Werribee - growth well outweighs returns. Its a good problem to have when you are in the market.

 

I say yes as it's still at a price range that's affordable for new immigrants and first home buyers. As long as immigrants keep coming and interest rates stay affordable, where else can you buy for those prices? But you also need to look at suburbs closer in and see what they are selling at, as Werribee still has houses for 400k on blocks of 500sq or abouts. Wyndham has the flow on affect as does Werribee from hoppers crossing and hoppers crossing from so on and so on. It seems the ripple affect is hitting the outer suburbs now as so much growth occurred in middle ring over the last couple years.

My opinion has been to always buy as close to cbd as one can afford. Even if its on a smaller block, a house, a townhouse or even a unit(a unit in Melbourne is also a dwelling behind a house) in good locations. If you buy in outer suburbs buy bigger blocks that have an option to add more dwellings on it at a later stage or if in need of cashflow.

 

I think you should sell too Barny.
Reap the profit and invest elsewhere as there's an oversupply in Glenvale area at the moment. Good luck with it!

The new Grand Central is looking nice - hopefully the new residents to Toowoomba will fill those rentals up!

 

Hi Barny, I've read all your posts under this thread, and everyone else's as well. I have joined the forum to join in this discussion.

I have successfully used the renovate to build equity to buy more strategy, and hold for capital growth and rental returns since my first purchase in 2010; however, I am wary of the potential uncertain economic times and don't want to be caught out too stretched (all my properties are between 80-90% LVR). I have one IP in Central Coast NSW, which has seen outstanding results. I have two properties in Rangeville, and trying for the second time to sell the ppor. Both properties were purchased in 2012, and the ppor purchase price was $361k, 4 bed, 911 sqm; I added a second full bathroom and a kitchenette and created a granny flat with separate entrance and updated the entire house (invested ~$35k). The house isn't really a good IP; its a family home. It was an emotional purchase, and I had always planned on flipping rather than holding, but it took a long time to finish the upgrade.

Oct 2015 I was 'marketed' into selling by auction, which was a disaster - lengthy expensive marketing campaign, not one offer prior, and no bids on auction day. I was anxious to get out of Toowoomba and to the GC, so I rented it out for $430/week. Bank appraisal at that time came in at $440k; bank appraisal May 2016 came in at $460k. A similar style house with a better renovation but less living space, smaller block, no rear access, and on a busy (South) street sold for $500k in Jan 2015. I would have though I could got close to that in Oct 2015, but as I said auction results yielded nothing. Due to believing the market is in plateau mode, and rates most likely to rise, I wanted my money out of this one and into something elsewhere (like you). Good tenants but poor presentation due to their lifestyle resulted in them kindly renting elsewhere. Listed for offers over $449k for a month, and now just dropped to offers over $429k before last week's inspection, and STILL no offers!

I just decided tonight that I was going to put tenants back in and just hold but thought I better do my research first. After reading the posts here, I am so undecided. Although I think Toowoomba is good long term, I really want to relieve myself of financial strain (this one is slightly neg geared whereas others are slightly pos), and mostly future financial risk. I want to put the equity on other home loans for future borrowing when I feel more comfortable with the economic climate.

Anyway, that is my current experience FYI, and I welcome any comments from you and others reading. I hate to sell now as I am giving it away...what if prices go back up and I could have made an extra $50k holding out for another year. But it sounds like it could be more than a year. I'm not sure if the extra $6-10k/year loss is worth it (mind you there is the tax refund!).

Toowoomba is a good safe bet, especially with all the upcoming projects. However, I have one property already on over 1000 sqm on James St at the top of the range, which should see good returns (either develop or sell to developer) once those lovely trucks are diverted!

 

Welcome to the forum, selling for me makes sense as my original scenario changed. Was not married at the time, considering kids or looking for a new ppor. But things changed which is why I'm offloading for something else in a better market and reducing risk and debt. Your scenario and financials will be different to mine and you need to still believe in why you invested in Toowoomba to begin with, so do more research as to why your property is worth less and what's happening in your area, will it continue to fall before it improves? Who knows. Definitely don't listen to someone like me who you have never met on an internet site.

This might be best to sit with your accountant and play things out so you haven't over stretched, especially with the new lending changes, taken and taking place which is chopping investors off at the knees.

Can't believe you went to auction, higher end market I would say yes, not at that price though, you were scammed for agent publicity. Agent tried that with me as well, moved onto another agency as all other agents agreed that lower end market does not work in Toowoomba.

 

I am a B&H investor and have been investing in property for over 35 years. My strategy is buy in the east coast capital cities. To-date, I have bought in Melbourne, Brisbane and Gold Coast.

I have never bought in Toowoomba because it is regional. But my family come from the Darling Downs, with my ancestors moving up there in the late 1840's.

My Mum and Dad bought a 4 bed, 1bath, 2 car brick house in Harristown in 1972 for $16,000. They have spent nothing on the place except normal maintenance including a few tins of exterior paint that I applied when I was on Uni holidays. Today, 45 years later, Mum still owns that house and it would be worth $330,000+.

That is 7% year-on-year growth, for 45 years. Yields in Toowoomba are always 5+% pa. That equates to a total return of 12+%.

For an old B&H investor like me, 12+% return is nothing to scoff at. I feel people today have unrealistic expectations of growth, with Sydney having 19% growth, but that sort of growth is NOT sustainable.

Do I think Toowoomba will have 7% year-on-year growth for the next 45 years?

Do I think my Mum's house will be worth $7M in 2062?

Who knows!!!

We all know that past performance is not an indication of future performance but IMHO, Toowoomba has more going for it today than in 1972.

Just my 2c worth.

 

Thanks Barny,
If anyone can suggest a good accountant, I would appreciate it: In toowoomba or a Gold Coast. That is one area I am not supported in. I completed 4 years of a 6 year accounting degree in Canada so do all my own financials, but just don't know enough about the investing aspect and realise that I would definitely benefit from listening to the experts; it's just that I don't even know who I would contact.

Still no offers,,,, and I had my agent ageee to not sign me up for exclusive listing or locked in period, so I could switch or even just start calling all the agents I know advising them of the opportunity for them to achieve commission. I would want this agent to benefit / not lose out, but at the end of the day I'm the one losing out on $430/week rent whilst it's just sitting there.

I need to do something??? I'm starting to think the house is not over priced it's just that buyers are not buying at the moment. But then, house is only worth what the market is willing to pay. If I really want out of it, I will have to 'meet the market'. But if the market isn't buying, then no price is going to entice them.

I was really keen about freeing up my cash, but maybe have to suck it up and go back to renting and just keep a closer look on the market. Not a good look though for the house to constantly being on and off the market?

Apologies for the confusing thread; as you can see I am just really having a difficult time with deciding what to do.

 

Thanks for your 2c worth kierank,
I am starting to conclude that's Toowoomba will produce a decent five year return. I now have to decide whether it's worth the wait. I also anticipate a dip or further chronic stagnation between now and then. I need to determine whether I'm set up to whether it out. Guess the place I really need to be asking questions is at the finance side of things as Barny suggested.
Thanks to both and welcome any further comments of course!

 

I am in a bit of a dilemma as well.

When Mum finally passes away (she is 88), her estate will be selling this property. I am one of five children - so I could use my share as a deposit (20%) and borrow the remainder (80%) to buy my siblings out.

My heart says Yes so that we keep the family home 'in the family' albeit as an IP.

My brain says No as the property does not fit my strategy nor purchase criteria although 12+% year-on-year return for 45 years is causing my brain to falter.

 

My condolences mate, glad she mate it through Christmas with the family. Hard right now, but listen to your brain and stick to your strategy.

 

You jump the gun. She hasn't passed away yet!!!

That is what the wife says .... and she is the emotional one .

Probably good advice.

 

Far out sorry bout that. Totally miss read it.

 

It's fine.

In fact, I had a little laugh.

 

@simonc - did you end up going ahead with this deal?

I settled yesterday on a duplex block in Glenvale with a 2 x 321 construction build to come. Not proceeding with the strata titling at this stage as my intention is to build and hold. Land purchase price was @ $190k and construction cost @ $385K.