Singer,

I have a slightly more balanced view than G7, but those pitfalls are all worth taking careful note of.

Assuming all goes according to plan and the railway arrives in 10 years’ time etc., there may be some growth. However, right now the prices are certainly high.

Bellbird Park may be quite interesting (I just bought in there). There’s a mob (Investa) building 1600 houses in the bush along Jones Rd (From Augusta Parkway) in a Springfield-style estate (check out the new sales office on the corner of those roads).

Thing is, I paid $215k for a new 4br house on 760m2 – the Investa land alone will be $160k for a smaller block.

I reckon my $215k house can only increase (it has amazing views of the bush behind Springfield/Brookwater) but some of these $320k+ houses on tiny blocks may come unstuck soon.

There’s just a bit of a ceiling that a project home on a 450m2 block will fetch. There may be some possibilities but I suspect the best strategy is to get into one of the fringe areas around there that is soon to be developed.

Mick

Definitely less risky to use as much of your own money as possible!

I’d suggest you take a trip or 2 to Brisbane, perhaps on a long weekend or something. Get yourself a Bris street directory, work out where some of the suburbs are along the train lines etc., and drive around them and speak to some agents.

Dunno about buyer’s agents, except that you’re paying someone else a fee that you could keep if you did the legwork yourself.

It’s really worth seeing the suburbs for yourself though, before you start to focus on a specific area. You can quickly get a “feel” for a place – the vibe…

Cheers, Mick

Christy,

The best cheap data I know of is the API magazine. They regularly publish some basic stats; but if you need more detailed historical data you most likely need to pay for it.

Hi Norma,

Selling the unit doesn’t really give you more equity, because you’ll pay Cap Gains Tax and agents’ fees. But what it does allow you to do is to access the cash and pay out some of the PPOR loan.

Doing that reduces your non-deductible debt (“bad debt”), then you can borrow against it for another IP (“good debt”).

But since the equity in the IP isn’t really substantial enough, better approach may be to borrow more against the IP to purchase something else (either now or when you think the market may be rising…). Eventually you should end up with SUBSTANTIAL equity which would make it worthwhile selling IP’s and paying off PPOR completely.

Mick

I’m one of the ones who has a DHA property and am quite happy. If you have any specific questions I would gladly answer them.

Cheers,

Mick

mychelle,

Be very cautious of a product that can supposedly reduce your loan term. It has generally been shown that these kinds of products generally cannot do that, unless you make extra repayments. Banks were forced to take calculators off their websites recently because they deceptively showed this – but in fact relied on increased repayments.

Generally the lowest true interest rate will give you the shortest loan term; other features however may be worthwhile, such as lines of credit to make it easier to purchase other properties.

Mick

To reply to 4. yes, in general brokers are good – although I guess you could get good ones and bad ones. I recently went through one from this forum (brahms, in Brisbane) and my brother went through aussie in Sydney – both were excellent.

I would always use a broker since they should have a wide range of lenders to draw on and you don’t pay any extra. I’ve had too many bad experiences with banks to deal directly.

Mick

Unfortunately, your plan has no benefit; the tax deductability of the loan is not determined by the property it is secured against, but rather the property for which the funds were used to finance. So drawing against one to pay off another does not help you in this instance. You are just shifting the same loan between security properties.

Cheers,
Mick

Why don’t you ride in on Friday to see a broker?

Mick

emmjay,

Ipswich council have a great flood map on their site, which shows 1 in 20 and 1 in 100 year flood zones, in case you have concerns about that:

http://www.ipswich.qld.gov.au/planning_development/pdfs/OV05.pdf

Note that in Brisbane there are many “stump” houses, but they’re not getnerally on brick stumps – used be timber, now usually galv steel. Such a house would now be built with lightweight materials (e.g. hardiplank) with a “queenslander” look, and an iron roof as opposed to brick and tile on slab. The look of such an estate would eb very different.

Cheers,
Mick