Advice on location options

Hi @markae welcome to the forum!

MarkAE wrote:

Hi All,
I’m a long time lurker, and I have missed a lot of opportunities in the past due to lack of confidence.But I was hoping you could let me know your thoughts on some research on where to buy, there is so much information,

Great honesty – but don’t beat yourself up. We all can look back and see missed opportunities but the key is to make a decision to act now and try to get good info to support your choices moving forward. The forums are a great place for that. You are right there is a lot of info out there – the key is to consume enough so you can see clearly but not to think you have to read everything ever written or you just end up back at analysis paralysis – which can also keep you from taking action. Balance is in there somewhere.

MarkAE wrote:

Objective – Capital growth in a property(s) for a total of around $500K to $600K for at least 10 years to help 3 kids with education and a house deposit.I’d use equity in my own house and aim to rent for as best as possible to balance growth with yield.

That is a sensible objective – and should be achievable long as you get the macro (major market cycle) and micro (property selection and due diligence) roughly right. I could definitely consider trying for more than 1 property if you can to spread the risk and access different capital growth drivers.

MarkAE wrote:

Locations – I have 3 locations in mind, each with what I think are pros and cons.
Sydney – Around Quakers Hill, Erskine Park. I know with rapid recent growth that future growth will probably be slow, but with inner suburbs so expensive I would assume the outer suburbs would be more affordable and in more demand. I live in Sydney so researching would be easier.Brisbane area – I don’t know QLD very well, but I have seen some posts around Brisbane suburbs not far from the city. From your posts it looks like Brisbane has not had the high growth that other cities have and there may be better growth here to come.Wollongong – This looks to be a popular area with a University and not too far from Sydney, so more people may head South to more affordable houses.
I may end up using a buying agent for some of these areas, as I have no experience or knowledge.I have been quoted some big fees to find a house, so I’d rather do as much as possible myself.
Thank you in advance for any advice or even some tips on what to look for such as rental vacancies etc.
– Mark

On locations – any of these (might) work, but I offer the following thoughts. Sydney is widely recognised as being at the late stages of a fairly major price cycle. As such you may see cap growth rates below the recent norm. If you are still mad keen on Sydney, don’t let me put you off, there are plenty of good BA’s and locations to consider. Western Sydney whilst cheaper than Eastern has also had huge growth and is pulling back now in certain areas due to speculation by greedy investors. If buying in Sydney I would target high owner occ percentage suburbs to avoid negative equity.

Brisbane/Gold Coast/Tweed – Yes I believe at the correct point in a major cycle after not much action for nearly 7 yrs. Inner Bris has grown though so be careful what you choose. Freestanding homes in the best areas you can afford close to CBD should do well. If units/townhouse then stick with older, smaller blocks, close to great infrastructure, avoid highrise than can be easily duplicated.

Wgong – My personal view is that much of Wgong is only half way through current cycle. Northern suburbs perhaps a bit more, southern a bit less. I am indeed seeing lots of folks moving out of Sydney for lifestyle, and increasingly it is not just retirees but young families who are in mobile service jobs (computer programmers, tradesmen etc). The ripple is well and truly started, to get property selection right is a bit tricky as there are so many options.

It really depends on what you want to achieve, and how active you are prepared to get. Many of my recent clients have been targeting older homes on large blocks so have future dual occupancy/small unit development options in the future, they may not see themselves as developers yet but it is nice to have the option to manufacture more equity if you want to. Also the land component is what really drives growth so having an extra site in a block can mean up to double cg rates in certain circumstances.

As always, keep reading, do your research and you will improve.

All the best!
Matt

Just my thoughts; obviously seek professional advice etc…

Maybe check out Logan. Beenleigh is doing ok but seems in a bit of a lull at the moment, and I hear there is infrastructure planned there. Cafe culture is on the rise, new coffee shops, town square etc. Rates are a bit steep though, and you would need to screen your tenants carefully. Returns for houses should still be over 5% at the moment.

Alternatively, Canungra is near the Gold Coast, and there is word that Tony Fung has big plans for Aquis Farm (formerly Patinack Farm) 4 minutes down the road. Nice town, houses around 4-5% rental return. Rates aren’t too bad.

Broadbeach seems to have some reasonably cheap units at the moment. This is in the Gold Coast, which will probably be affected by the Commonwealth Games there in 2018. No idea of returns, just looks interesting.

Good luck!