Townsville house or units?

Discussion in 'Where to Buy' started by Lollie, 24th Nov, 2020.

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  1. Lollie

    Lollie Well-Known Member

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    My son has a budget of $330K. He wants good cashflow, a set and forget investment, so not sure if he should purchase;

    1) an older style duplex in the outer suburbs
    2) 2 modern units in small blocks in better suburbs closer to the cbd
    3) two older houses on blocks of land further out

    with option 1 - rates would be $6000 on a duplex, he would have to organise his own insurance and any repairs and maintenance on the block would be paid solely by him.

    with option 2 -he would have to pay and about $3700 on individual units for rates. The units would each have strata levies and an exposure to possible special levies down the track.

    with option 3 - he would pay rates, insurance, repairs and maintenance and the net rent may not be as high.

    What do you think? What am I missing?

    Thanks :)
     
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  2. wilso8948

    wilso8948 Well-Known Member

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    Option 4 - brick House, 600spm block min, flood free, 3 preferably 4 bed, 1 or 2 bath under $300k. Use the rest for purchasing costs and small cosmetic reno. Rent for 6%+ gross yield easy. Set and forget, good cashflow and better CG prospects.
     
  3. Lollie

    Lollie Well-Known Member

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  4. Lollie

    Lollie Well-Known Member

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    Which areas/suburbs wouldn't you purchase this type of house in?
     
  5. wilso8948

    wilso8948 Well-Known Member

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    The link you referenced is something I would purchase if I had to go duplex. But what is the goal/purpose of the property? Likely going to get some 'interesting' tenants over the years with a duplex in Kirwan.
    Have you ever been to Townsville?
     
  6. New Town

    New Town Well-Known Member

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    And you might incur more expenses with a duplex, e.g. gardening costs, almost double rates, poss can't seperate water bill for tenants.
     
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  7. strongy1986

    strongy1986 Well-Known Member

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    a lot of duplexs are a trap

    -you will have higher vacancies and poorer tenants
    also you save nothing on the expense side of the equation as councils and water are often happy to double the rates....
    insurance companies do you no favours either

    that duplex you posted would be lucky to net 13k a year after expenses
    for me fair price would be max 200k

    mid 3s is about a 4% net yield which is unnaceptable on an asset where the market value is directly related to the income it can produce (similar to commercial property)

    you should be able to get the same net yield on pretty much any house around tbe 250k mark and you have more scope for growth
     
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  8. Lollie

    Lollie Well-Known Member

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    The goal is for mainly cashflow but also some capital growth. To hopefully keep the property for decades and fully tenanted because it will always be in demand from good tenants and have some capital growth.

    I've been to Townsville once, but for a holiday, not to look for investments.

    I'm still talking to property managers about what tenants want to rent.
     
  9. Lollie

    Lollie Well-Known Member

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    Why? and are you talking about duplexes in general,? Townsville in general ? or the Kirwan areas?

    I thought duplexes would be attractive to tenants because they can provide more privacy if they're set up well, also tenants can have their own fenced yard for kids or pets, more land in general, parking at the door etc
     
  10. strongy1986

    strongy1986 Well-Known Member

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    in general
    if you get a bad tenant they can upset the good tenant very easily
    also the rent is a lower than a house and the expenses are the same
    so you want to make sure your unit price is low to start considering them

    those ones you linked are about 160-170k a side
    a house in kirwan is around 220-250 and you will get the same NET return as on the duplex

    So why would you buy a duplex if the return is the same as a house?
     
  11. Lollie

    Lollie Well-Known Member

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    Yes I see your point. Getting a good house in a good part of Kirwan For $220K to $250K will be the challenge but we'll try
     
  12. wilso8948

    wilso8948 Well-Known Member

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    You'd be surprised.
     
  13. Lollie

    Lollie Well-Known Member

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    The market has heated up in Townsville. Strong demand for sales and rentals
     
  14. Lollie

    Lollie Well-Known Member

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    I narrowed my search to only masonry blocks, cement blocks or brick and low set, because I thought they would be better quality and might have better capital growth and less risk in a cyclone. Am I wrong?
     
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  15. fumid

    fumid Well-Known Member

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    Looks good,
    just wonder if there will be any cyclones/flood soon in TSV,
    It's tropical cyclone season now (November 2020 – April 2021)
    Notable cyclones to affect the Townsville Region have been:
    Cyclone Yasi (2011),
    Cyclone Tessi (2000),
    Cyclone Sid (1998, in particular damaging The Strand and causing major flooding),
    Cyclone Joy (1990),
    Cyclone Althea (1971),
    Cyclone Leonta (1903),
    Cyclone Sigma (1896).
    The city was also affected by the 2019 Townsville flood, the convergence of a monsoon and a slow-moving tropical low.
     
    Last edited: 29th Nov, 2020
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  16. wilso8948

    wilso8948 Well-Known Member

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    Up here now. She's sunny and hot outside. That can change though..
     
  17. fumid

    fumid Well-Known Member

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    Are you in Townsville now? For property? How's the summer there like?
     
  18. jared7825

    jared7825 Well-Known Member

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    There are a few in this price range , although some already under offer in the <$250k range, at that range you should see $300 plus per week if it’s not a dump
     
  19. wilso8948

    wilso8948 Well-Known Member

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    Close. Just down the road (by a few hours). Hot and it rains a bit..

    $300 and then some!
     
  20. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    I'm sitting by the rooftop pool at Rambutan on Flinders St. Lovely breeze now. Was hot and dry today. Townsville is very different then just a little further North. Very dry desert like, but with a beautiful tropical esplanade. Really different feel to Cairns. While the hotel is busy, the restaurants and pubs/clubs around all look very closed