Forum Replies Created
Hi Nathan,
Regarding your objections:
1. Certain City – Darwin is not just a certain city, according to RP Data, Property Observer, SQM Research, and APM Monitor, Darwin is the property market leader since 2004 with highest rental yields, highest employment participation, and lowest vacancy rate. It is a property hotspot according to experts, not a certain city.
2. Price range – the price range was defined in the initial forum post (question "should I invest in two properties around $240k each or in just one property?". I adviced that it would be a better decision to invest in one property. Just one property means that we multiply $240k by 2 and we get around the price range I mentioned)
3. Certain type of units / developments / commission: At this point the company I represent, Sunbuild, does not have anything for sale. If you enter our website you can see that all our developments are sold out, so no commission or development offloading here..
Cheers
Hi,
I want to give you some examples from our company's financial department, so you can have an overall picture on what to expect in terms of expenses and incomes.
Project: Sunset Dreams – Rosebery suburb (Palmerston)
Median price $429,000
Median weekly rental $490
Body corporate costs per week $63
Tax savings $9,000 per year
Project: Evolution on Gardiner (Darwin CBD)
Prices from $955,000
Cash flow projection:
1. Cash Inflow
– Apartment Rent: $67,165
– Tax Refund: $8,834
2. Cash Outflow
– Body corporate: $6050
– Insurance: $270
– Interest – Loan: $52,197
– Management Fees: $4,702
– Rates & Taxes: $1,070
– Repairs & Maintenance: $1,500
NET INCOME: $10,211
Regarding depreciations and tax savings, for maximum benefits you should definitely consult a professional. We work with Rider Levett Bucknall, they provide excellent capital allowance reports.
Cheers,
Emil
Hi Tracee,
I definitely recommend that you invest in an apartment, due to the higher affordability and constant rental growth. Also, I believe that a unit of around $450k, in a crowded suburb, with many amenities and high rental yields, can offer more capital gains than dividing your investment into two $240k properties.
If property prices are as low as $240k than the area may not be so attractive, and it may not have a constant economic growth potential. A thorough research is mandatory. Success is determined by investing in a dynamic market, sustained by long term projects that boost the area’s economy.
RP Data, Sqm Research, Property Observer, Residex, and APM Monitor can help you identify good suburbs with high capital gains potential. I recommend you start your research with Darwin and its suburbs, as the region registers to have the highest rental yields and lowest vacancy rates in Australia.
Cheers,
Emil
Hi there,
Your finances definitely allow you to find and seize great investment opportunities. As a first investment, I recommend looking for high and also safe capital gains. You should take the gross rental yields and vacancy rates into account, as these indicators can give you more details about the area your are looking to invest in. For a smart investment, you should look for rental yields higher than 5.5% and vacancy rates lower than 2.5%. You could probably benefit from more research regarding Newcastle, I myself have noticed that the current trend is not that optimistic with prices falling by 4% in the last 12 months, according to APM. For higher income potential, I recommend the Northern Territory or even some areas of Queensland.
New units developed by important builders can guarantee quality finishes, an important element on the long run for capital gains. Also look at the economic drivers the area has to offer, like gas projects, mining, tourism, defence, and at the population growth, because if you identify a hot spot then your investment is indeed safe and profitable.
Cheers,
Emil
Hi there,
If you are a beginner at property investment, you should put safety first and consider a property with a low level of risk. I believe that it is essential that you find both a suburb with growing potential, as well as, a quality unit. In case your finances are limited, a good strategy is to buy off the plan. In this way, you make no compromise concerning location and quality. Find a reputable builder to make sure the development is delivered on time, and also investigate the defect clause period.
Darwin with its suburbs it is the perfect place to invest in, being a real estate hot spot. The presence of key economic drivers such as billion-dollar gas and mining projects, tourism, and defence ensure massive capital gains. As for the suburb, I recommend Nightcliff, as its Darwin's most crowded and popular suburb close to all amenities you mentioned in your post.
Cheers,
Emil
Indeed, you are absolutely right to state that low vacancy rates and high yields are of key importance when considering investment choices. There is yet another crucial factor that determines the success of your investment, namely buying in the right place, one that shows sustainable economic growth.
In my opinion, NT is the perfect place to invest in, as Darwin is experiencing economic boom, leading the property market since 2004 with gross rental yields of above 6% for units and vacancy rates as low as 1%. Delloite forecasts a 4.6% annual economic growth, massive gas and mining projects will continue to inject capital into the area’s economy, so everything is pointing to a bright future. With gas and mining attracting multi-billion projects, tourism flourishing, defence force growing, I would say that you couldn’t find a better place to invest in.
Cheers,
Emil
