QLD Where to buy IP2 under $300k

Hi all - I'm another PC member looking to hit up QLD but as you all know, there's just so many pockets to consider...

After some topline research and reading, I've narrowed down into the following regions for IP2: Logan and Moreton Bay. Strict budget of $300k. It's mostly going to be a cashflow move, however CG in the short and/or long term would be great too...

What would you guys recommend? Is there a hard and fast way to pick between the regions? Any key suburbs to look at in either region?

Thanks for your help

 

Hi there

How did you come up with the $300k budget? Is that based on the deposit you currently have or is it related to borrowing capacity?

In terms of picking where you buy - look at where existing infrastructure is and / or there is infrastructure going in, rather than suburbia.

 

Thanks for your help It's based on deposit and keeping to an 80% LVR.

Do you have any suggestions as to where to buy? There's so many pockets to QLD - it's been incredibly difficult trying to get my head around it given I'm in Melbourne and only know this market..

 

That's interesting...so, would it be correct to assume you are doing 80% LVR so you may avoid LMI?

Whilst I cannot say 'where to buy' - something to consider is whether $300k will buy you a quality asset? I think $400k will - which would require c. $64k odd in Brisbane, and open up further opportunities for assets with an upside.

 

Yep, to avoid LMI as this will limit my ability to move forward in increasing my portfolio. I guess it's also a way to manage risk: given it's my first time investing interstate.

But I guess if the numbers stack up, I am happy to pay LMI.

Good point re 300k property. What kind of upside are you referring to?

 

The whole 'avoiding LMI' notion is greatly misunderstood by most newbies and I'm sure the brokers will expand on . Also a reduced LVR doesn't necessarily reduce risk. It can also increase risk by purchasing poorer assets.

 

I think you really need to sit down with good mortgage broker and your accountant to work out proper strategy ..

What's the goal here and what's the overall financial/cashflow situation like? Lot of questions to be asked before jumping onto/finalising the area..

But just as fyi, both the areas are not bad, but that doesn't mean they the right fit for your strategy..

Will strongly recommend to tea-up some time with your mortgage broker and accountant and take it from their ...

Cheers,

 

Ok, sounds like you may be looking at flexibility with tapping into the equity in the near future by value shopping - which will enable you to purchase the next property sooner.

I appreciate this does help accumulate x number of properties asap - but what if its at the cost of future growth?

Ultimately - what will it mean to you when you have accumulated those x number of properties?

Asset with an upside to me is a property which is close to infrastructure, bread and butter property, close to transport, ideally a block of land (at least in Brisbane); not something which is out there in the suburbia - away from transport, convenience etc.

 

hi @werdna,

with the budget of $300k, it would be difficult to find a decent investment in Moreton Bay ATM, let alone cashflow positive.

if you can expand your budget a bit, you might have more options.

like @Leo2413 suggested, " LMI" is not an evil thing, if you budget is limited & servicing is good ( aka good income), using LMI could get you a lot more solid investment.

 

Hi @werdna,

Couple of thoughts here:
1. I concur with what others are saying in the replies - don't limit yourself to just $300K budget purely based on your deposit and wanting to avoid LMI. I for one also misunderstood the LMI concept initially until my broker showed me how I can leverage off LMI instead. So first step should be to sit down with your broker to identify and understand your limiting resources and how this impact your overall investment strategy. My blog article on this should hopefully be able to provide some guidance:
[Investment Strategy] What is your limiting resource in property investing? - Lend Power

2. Going by $300K budget, you will be limited in terms of the type of assets you can purchase across Logan & Moreton Bay. For Moreton Bay you're pretty much out unless you want to get townhouse or even apartments which I would not recommend. Which really only leaves you with Logan - and also limited options in Logan too for houses.

That's why everyone above is saying you should revisit your budget with your broker before jumping to the conclusions. To get a decent property across either locations I would plan budget closer to $400K instead. For QLD you would want to stick with houses on a decent chunk of land as close to CBD/infrastructure & transport as much as you possibly can.

Cheers,
David

 

Thanks for your help @Leo2413 - you've raised a very good point here. I paid LMI for IP1 and thought it'd be nice to avoid it for IP2.. but I'm willing to pay it if it's a good deal in the right location.

Thanks @jazzsidana! I've done this today.. things are looking good now! Appreciate your help.

Thanks @Property Twins - awesome advice. I'm now looking to bump up the budget so I can find assets that tick these boxes..

 

Thanks Eric - I'm looking to expand budget slightly which I'm hoping will expand options etc. Hoping I'll be able to find something soon!

Thanks heaps @David Shih - appreciate the advice here. With so many pockets to QLD (I'm completely new to the market) - your advice here is really valuable.

 

@werdna Did you add any suburbs to your list? Just curious on a budget where is good in QLD.