QLD Will Woodridge & Logan Central ever improve?

Agreed. My understanding is that the Sydney/Melbourne wave does seem to generally flow north.

As for Woodridge, strangely my IP there has been consistently low maintenance and positive, which seems contrary to its reputation. Not much growth yet, but I'm expecting the ripple effect from Brisvegas.

Jen

 

I purchased 2 Logan properties at the same time in 2014. Around $250k each. yield is 6.5%. One had tenant problems, the other one didn't. There's a probably a 10% increase since then. I still believe I purchased slightly discounted rather than a 10% increase in the 12 months though. Previous owners paid around $280k in 2008.

I chose Logan for the following reason:

1. If SE QLD is on the rise, the market will not leave Logan behind.
   
2. Low entry, I can buy 2 x $250k on 6%+ yield. I can't do this in Sunnybank or Chermside or Wynnnum..
   
3. It is the only council that legitimately allows granny flat to be built and rented out separately ( Ipswich scaled down to 50m2 size GF. I do not consider this a viable investment grade)
4. With a $120k GF build, total cost House + Granny =$370K, I could achieve a yield of close to 9%
5. There are comparable in Sydney West that in rising market, you can make $50-$150k profit, selling existing house + new GF build(the bank valuation may not reflect this but market does)

For me it's not a long term keeper for the Logan properties. More of a sit and wait for next cycle. If cycle comes early, probably sell in 4-5 years, otherwise in 7 years.

If the price in 2021 is the same price I paid for in 2014, then be it. At least I have the 6% yield to get me through the hard times if IR does rise. I can also build a GF to increase my yield play. If I purchased a property in other council and this worst case of no growth for next 7 years comes to play, I dont have this luxury to build GF

Just covering my basis. SE QLD cant just leave me behind

 

I'm heavily into Logan area. No problems with tenants, and have been pushing rents higher in last 12 months.

Still huge upside for growth + cracking yields.

 

We had 7 properties in Logan I'm 2000's

One was bought and sold with the same tenant in place who rented the kitchen ...

One had the tenant from hell , had a few minor issues , but generally not to bad .

No major damage , just fairly frequent queries .

I think Logan will do well and 2013 -2014 was a good time to buy . More competition at the moment and I'd assume you'd have to watch closely to get good deals ( though I may be wrong ) . The one thing I don't like about property investing is spending all my spare time looking at properties . Happy with the web stuff , it after a day or so looking at houses I'm bored . Prefer to be doing my songwriting .

Hence I like to try and find places with less competition than Logan has at the moment where the good deals are sitting there and it's just a matter of deciding which ones to make offers on.

Cliff

 

Suggestions on the best way to tour the area?

Also, what are the better suburbs in Logan council under 350k?

 

Best way we found is with an agent . Have properties to see and while driving around ask questions . Some are better than other .

Better is a relative term in Logan . We bought in Kingston , Woodridge , Logan central and slacks creek which are probably the four main central suburbs and you should be able to pick up " good " properties under 350 and probably under 300. Nothing flash , but solid rental properties . I think you'd be struggling to get anything under 250 in Logan at the moment , BUT , we haven't been on the ground up there this cycle . From what I hear there are " good " deals , but you'd need to know the area to recognise them and move quickly when you see them .

Cliff

 

Corner blocks in Logan city with sub division potential are also still being sold without a premium by agents that are not familiar with the new planning changes

 

I think if you asked an agent in the Logan area what % of their investors are NOT from Sydney, it would be a small figure.... I know a bunch were up on the weekend.

 

Yes, many if not most investors are from Syd or Melb at this stage, although in my eyes its not such a bad thing considering the prices and yields Syd and Melb have been used to in recent times.

 

I've noticed that as well just watching the prices rise with every new property that comes onto the market within that area. If there is an average of 7-8% growth on your property each year then it should double after 10 years. Normally averages don't work as property cycles seem to spike up at certain times. Just like what has happened in Sydney where prices were really flat for almost 7 years and only in the last 3-4 years it suddenly spiked up.

It's a long term investment to hold onto properties and just to be patient...

 

I would say it's slightly more than 7-8% in the past 12 months. From being on the ground every month or so, this is what I have seen

- Lowset brick & tile places were selling for $250,000 mid last year. They are generally asking for $280,000 to $290,000 now. Rent is still the same at $320 per week. That's a 12-16% increase

- The product I was buying, highsets with dual living potential. Last year was buying these for $270,000 to $280,000. Now they are costing me $320,000 to $330,000.

$50,000 increase may not seem alot compared to Sydney, but factor in that at 88% lend you generally only need $50,000 deposit to pick these up, pretty good ROI and the rent pays for itself.

Speaking to the agents, they indicate the market is still picking up and the best growth could be ahead.

Cheers,
Michael

 

On Woodridge, there are different parts. It's a fairly large suburb so I will break this down:

- Woodridge Station - stay away. This area is rough! The townhouses and units around Defiance Rd & Blackwood Rd isn't somewhere you want to buying

- The creek from Harris Fields State School to Whitney St floods, stay away from this

- Trinder Park Station is a much nicer area, more home occupiers live in this area. Sections to the left of Trinder Park Station has a good feel to it. You are close to the Karawatha Forest, wouldn't think you are in Logan. Just check for Fire zoning here

- Some sections above Smith Rd have been townhouse zoned, good potential there. Between Smith Rd and Compton Rd would be desireable. This area is very close to Underwood, around 20min to CBD and has zoning potential

As a general guide for Woodridge, go North and stay away from Woodridge Station.

Hope this helps,
Michael

 

This isn't Woodridge or Logan Central but a write up on Slacks Creek. Copied this across from SS

Slacks Creek can be broken down in several sections:

i) Between Queens Rd and Paradise Rd. This was originally Kingston but later renamed SlacksCreek. It's less desirable and the prices tend to reflect this. Stay away from the flooding areas around Darren Drive and Borman St. Also stay away from any street names with gemstone names like Opal, Garnett, Diamond, Pearl St etc.

http://en.wikipedia.org/wiki/Kingston,_Queensland.

Look at section on Kingston Industrial Waste Incident and Kingston Goldmine (copied below)

In September 1986 residents, in the Diamond street area of Kingston, started to notice black sludge beginning to ooze from the ground and seep into their gardens and began to complain of health problems to the Logan Council. (p4)[4] By April 1987 the council was warning people to avoid the sludge. Surrounding soils and ground-water were also found to be contaminated.

ii) Paradise Rd and Park Rd. The original SlacksCreek. Take a drive around and you will find the houses are nicer and the streets alot more presentable. A few small sections which floods so stay clear. Prices here are more expensive.

iii) North of Park Rd. You don't want to go too far north as it becomes an industrial area.

Hope this helps.

Thanks,
Michael

 

The State government recently released this information about a Logan Renewal Initiative for the public housing in the area:
https://www.qld.gov.au/housing/public-community-housing/logan-renewal-initiative/
I'm not sure of its relevance, if any, to investors other than a fair bit of new stock coming on line.

 

David, where do you think the new stock will be? I understand that there is opportunity to buy or rent the new stock.

 

I don't know. I just found this when doing some research. It reads as if existing social housing will be redeveloped:

"Social housing will be renewed and redeveloped to better suit the needs of families, older people, singles and people with a disability. Over time, new social and affordable housing will be built for people to rent or buy. This includes the construction if approximately 2,600 new dwellings for rent and sale, resulting in an increase of 800 social and affordable dwellings for the community".

 

Thanks for the rundown on Woodridge, Michael.

Do you have a similar breakdown of Logan Central?

 

That's awesome. Thanks for sharing that Mike and it's good to see there's signs of growth. Plus if you have at least 5 properties in the area averaging $50K growth on each on you'd be sitting on an extra $250K of equity. More than enough to buy a few more properties.

 

Logan Central has all the amenities, close to transport, shops etc. A few things I watch out for

- Properties that back onto the train line that goes through Logan Central. Generally anything on Jacaranda Ave I stay away from, unless you get a really good price

- I've heard that Civic park at night has drug problems. My property manager told me to avoid houses which back directly onto the park

- The streets around Logan Central Plaza have good zoning potential. At this stage it's zoned Low Density Residential but could change as it's close to everything. Picked up one recently on Ellen St for this reason

I find you also tend to get a higher concentration of Islander families in this area.

Hope this helps,
Michael