Where to Invest 2018 first timer

I would like to buy my first IP but can't decide where to begin. Brisbane, preferably north of Brisbane. Got that. With a budget of $400K which suburbs should I be looking in for capital growth?

Also what are the popular opinions on commercial properties for investment purposes? Is it too risky, even if the commercial property is already rented with a 3 year lease to an established 10 year business? I have the funds to purchase two properties at $400-$500 each, and I was thinking one commercial and one residential property. Is this a good idea, or should I stick to solely residential properties?

 

All depends on your goals and financial situation. If I were looking to buy in Brisbane, I would try to buy as close to the CBD as my budget would get me, Freestanding home. If you can add value to it in some way then even better.

Just my take.

 

A lot of questions there but it seems to me that whilst Brisbane and Hobart are gaining much media attention these areas will follow an oversupply market. I would suggest areas in the south east of Melbourne. Although prices are forecasted to flat line for the next 2-3 years I believe that during this phase the Melbourne population growth would have increased to tip the scales back to to demand > supply.

 

I'd be careful about classing a city as 1 market. There are thousands of markets with different stock types. Some will perform very well.

 

If u want to diversify your $$ suggest picking up a ~600k residential house closer to the CBD and the other 400k into a few commercial property trusts.
A single commercial prop that you'd pickup for 500k would likely yield no better that a trust and you wouldn't have all your eggs in one basket with regards to a single tennant- good luck

 

Interesting idea. I don't actually have the full $500k to invest in commercial property trust, but I could get a mortgage for a commercial property. Perhaps I am not understanding you correctly?

 

Hi- assumed u meant u had funds for 2 props @ $400- $500k so was just suggesting 1 residential and 1 property trust rather than 1 resi and 1 comm property

 

What lvr is that purchasing power based on? Ie what depositdo you have?

 

I have $200k in savings. My property investment advisor has recommended a dual living home in Wulkurakka, Ipswitch. Off the plan, $480, ans the suburb is quite bare. While I like that the property should be neutral or positively geared, there are so many other things I don't think about it. And it just kind of seems like my advisor is only seeing dollar signs. But he keeps telling me it is good as a long term investment. I am due to make my first payment in a week but have serious doubts. Thoughts?

 

Sounds suspicious to me. Is he listed on PIPA? You may have dodged a bullet coming here. I wouldn't commit to that kind of deal without being comfortable I know what I'm getting into.

Sounds to me like you've got a great deposit, no reason not to look at established homes, with owner occupier appeal close to the Brisbane CBD.

 

I think we will back out of it today.... Just doesn't feel right.

We would like to purchase two investment properties, and we think we will still go with the commercial property, established business, just fully renovated the space for their expanding business, $535k, caboolture/moreton bay. We can't afford the stamp duties on both, so we are thinking about dropping the wulkurraka/Ipswitch otp property and only going with the commercial property. After that we would have enough savings to purchase a second property for around $400k.
Are we making terrible decisions or are we on the right track? Ans which suburbs to look in? Is $400k enough for something decent?

 

You cant afford the deposit for both. Have you checked what lvr you can get with the commercial?

 

We don't want to borrow more than 80%

 

Yeah, don't do it. It's ridiculous advice imo. I don't know where all these so called 'expert advisors' come from.

You can buy a house in Goodna which is 23km closer to the Brisbane cbd And in low 300k.

 

He is one of the most acreditted and respect advisors in the country, so am I just being paranoid? Do yoi think its possible to purchase positively geared closer to Brisbane cbd for $400k?

 

You can't buy 2. you need to take account stamp duty, registration fee, solicitor + search fee, building and pest inspection and mortgage fee (valuation, financial and legal advice and etc). which will be upto 7~8% of the purchase price.
Also, commercial properties in this price range (sub $1m), it's either a strata titled shop with a huge body corp? management fee? upto 20~30% of gross rent or something hard to find a tenant - great risk of vacancy (see alot of offices, warehouses or retail shops vacant over a year)

 

To be frank, imo that doesn't mean anything to me.

I think its easily more possible to purchase a much better deal in a higher demand area much closer to the CBD. I just did a quick search on a random suburb like Goodna, its 22km closer to the CBD and over 150k cheaper than the one that was recommended. To me, there is not only a huge difference in value but also risk. Also if you are looking to expand your portfolio before you reach 96 then you will need suburbs which have a decent timeframe for growth. If your after CF, it may be a better deal to buy in that place recommended..but for over 150k in price and 22km further from the cbd than Goodna (just a random place I picked btw) I don't see any overall real value. And btw you can buy a house in Wulkuraka (the suburb in question) on a 800sqm block for only 320k.

That's just how I see it. But I'm not one of the most respected, accredited advisors like him.

Maybe have a chat to @See Change who I think is familiar with that whole area and also has some stock in Goodna.

 

Plenty of options where to buy, read around a bit & educate yourself first IMO.

Re your adviser, often incentives come into play when promoting stock. There's quite a few lessons seasoned investors learn through the process, one of them is to know how advisers are incentivised & ensuring they're working for you. Conflicts of interest are rife in the property industry, so its worth doing some digging here. As a general guide, anyone you're paying to buy property for you shouldn't really be paid from the selling side either (conflict of interest).

 

Well, we wouldn't technically be paying him for the purchase of the otp Wulkurakka property, the builder would pay him a commission, but essentially I would just be paying more for the property to enable to builder to do this, yes? Either way, I am paying for it. I have found similar otp properties in the same area advertised at low 400ks (no specific price), possibly $30-$50k less than what I am being charged. But I still think I am going to back out

 

Thank you very much, and I'll definitely look into this area