QLD Townsville - Good time to buy?

As an owner of an investment property in Oonoonba (a display home) I can honestly tell you council rates and insurance costs are killing me and I will be offloading my property as soon as the Builder moves out. Why anyone would invest in this city is now a question I ask myself and my wife nags me all the time?

 

How come you found that out only after purchasing it?

 

I work with the Builder there and was helping him out to get a display home off the ground so let's just say money wasn't coming in to the equation initially as it was a business arrangement for a different purpose then just an investment property. It's the fifth property we've owned as an investment and I've done it in three states and this has been the worst one I could imagine but it wasn't doing anything but helping generate sales for our business.

 

parts of Onoomba are flood prone and after the 2019 event I wouldn’t be surprised that it’s expensive. My holdings are not in flood suburbs and insurance is reasonable. Rates are high but no worse then other costal regionals in Qld, yields are high which makes up for it on most properties

 

My property had water right up to the front door during that flood. If I can figure out how to share a photo here I've got pretty damning (pun intended) proof! My Builder told me the good news was that we were on the "high" side of the estate but I was just grateful he was there on hand to protect the house as it is his office. He and his business partner spent that weekend ferrying people to higher ground and I was nervously waiting by my phone with hour by hour updates during the tide. Harrowing stuff.

 

Terrible place to buy an investment property, no capital growth and looking at minimum $6000 a year for rates and insurance, minimum.

 

rates including all water use are 3200 for me

so really the rates would be around 2k
and water 1.2 k

my insurance is 1500 -.insured value 400k

so yeah not cheap but not minimum 6k

townsville.is not a place to invest for.cashflow and neither was darwin before it boomed

in my opinion at current prices townsvills has a crazy amount of potential that wont be seen until the opportunity has passed everyone by

its happened in the past so can easily happen again

 

When buy in Townsville, did you get solicitor in Townsville? How much they charge? Any recommend? Or just use a solicitor in Brisbane?
When I look at the flood map, I am a bit confused that, when I see blue in front of the house and said **creek 2014 on the house, it means it flooded in 2014 from **creek?
When I quote a same house on different home insurer, it differs from $1500-$4500!

Another questions that there's are a lot of 8/4/4 house includes 4 units on the land, without strata fees, and sell as a house, how this going to work? Will it be looking as a boarding house and charge more electricities or rates?

 

What do you mean by a lot of 8/4/4 house includes 4 units, do you mean like the below links which is clearly a block of multiple units? No strata fees/owners corp/ body corp etc when you own the entire block as its all your responsibility.

https://www.realestate.com.au/property-unitblock-qld-north+ward-134228078
https://www.realestate.com.au/property-unitblock-qld-hermit+park-134583546

Large Insurance price swings are not uncommon in North Qld, the 2014 event would have been from a cyclone if memory serves me right.

 

Yes, exactly these house used as 4 units, looks pretty common there, are they registered with council as a unit or a house? Cal legally rent out as a unit? For insurance it should get quote for 1 house or 4 units?
Which insurance company you guys go for? when I quote for a 4 bd house 600m2 land (in flood map it's a blue in front street of the house for 2014 flood) NRMA quote basic $4270, AAMI quote $2907, westpac quote $1500.

 

Without seeing the particular property of interest, the majority of these type like my links have been build as unit complexes in the 60s,70s, 80s, not an original house that was then split, but you do still come across those. Therefore in my example type the land should be registered with council as a multi dwelling, you can check this on the rates notice. Perfectly legal to rent as a unit as that's how they are built and designed to be.
However remember that this means in terms of rates 4 x waste collection, 4 x sewage and depending on how its metered/ connected multiple water charges (again check the rates notice)

I use Suncorp for my duplexes as they are fairly competitive in Qld, strata type insurance for building and common areas on one policy (have to call up for a quote) and then 1 separate landlord policy for each unit inc contents, (I had mine in place before COVID)

 

Actually those 2 you listed are exactly the ones I am looking at with potential to buy, the rental yield looks pretty good, do you reckon those a good investment?

I am also looking at those duplex as well, a lot of duplex have 2 units, so is your rate(council water) on one house or on 2 units? So your insurance is one for building and 2 for landlord which include if tenants damaged the house yes?
When I quote with Suncorp, if I choose building only, it's only 2 choices- I own and live in the home, I am renting, can't choose I rent it out.
When I try 10 Rose Street, North Ward (8bds/4/4) with Suncorp, it quoted $7400/y, and replacement cost have to be no less than 1.1million maybe due to 8 bedrooms? House only sell around 0.65million

And when you buy, did you get a solicitor in TSV or just use one in Brisbane is fine?

 

If the property is registered with council as a dwelling with two, three, four etc units then services are charged per unit. rates on my duplex including water are $2995 per half and that's not a very high land value either, but the water, waste, sewage etc is the killer when its x 2, so you do need higher yields to compensate for this. I would ask the agent for the rates as its not uncommon to be up around $10-11k per year on a quadplex like these that I have looked at previous

You will need to call suncorp for the building only strata type its not able to be quoted online, tell them you will be owning the whole block of units, my insurance is under $600 per year for the duplex on around mid $400k cover on building and common areas. Each unit has a land lord policy to cover all contents not covered by building only, public liability (20million) and rental default as it was purchased pre COVID

I have used both Brisbane and Townsville based, settlement can be in Brisbane as some prefer this depending on the seller, either way it wasn't a big issue for me

 

Thanks soooo much Jared, I usually quote home insurance online and make payment right away, which might not a good idea. I insured a duplex with 2 landlord policy which is quite high. I might should do your way instead, when I called some company, they always asked me to get 2 seperate landlord policy for each unit including building and landlord, never mentioned I can get one building insurance and 2 landlords. How much is your 2 landlord policy? around $300 each? I should call them tomorrow to see if can save some.

I asked a few TSV agent about the rates and how the property titled, they don't know much or they just don't want to tell details lol, will ask again.

 

Hi Jared, how much property agent charge for renting service?
And do you have a local solicitor to recommend, how much the solicitor charge?

 

It's interesting some of the TSV property agent seems never pick up the phone, or return to the phone even you leave the polite message again and again, never reply to email/online enquiry, or even mobile message?

 

Can someone to point out on a website where there is interactive (or not interactive) readable map of flooding prone suburbs? There are a few I found but it is very hard/impossible to read

 

Call council to confirm, they will explain if it's a flood area

 

Why change currajong to mysterton?

 

Yes a tad over $300 per unit paid annual for the landlord contents insurance
Was much cheaper for overall building coverage and then seperate policy, sometimes it pays to pick up the phone and talk to a person, but you have to own the entire duplex/triplex/quadplex etc for the overall building policy

I always ask for a copy of the rates notice, some are more forthcoming then others