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Mal,
I have an apartment in Melbourne leased to a boutique operator. It’s an older style apartment in the french end of the city. The net return is 9%. You need to convince yourself that the deal is worth your money. I was happy with this investment as:
– it was a older (1930s) apartment with high ceilings, large and had character
– the block also has owner/occupiers
– once the lease expires, it will be able to be sold at a price higher than one under a commercial lease could
– the price was right
So there are some options out there that may fit the bill.Completely forget about being able to use it the few times of the year that you are in Brisbane. You need to treat any investment purchase as a business decision. You can get great deals for luxury hotels on lastminute.com.au etc.
With that in mind, you need to consider if you could do more with your money. Buy a house with 20% down which will most likely have better capital growth and put the rest of hte cash in a term deposit at 7% or diversify into shares. Weigh up all your options, do the math and take the best route.
Christian is on the money for the suburbs with good potential. I think $400k would be at the very bottom of what you’d pay for a house.
If you are going to consider units, low $400s will give you a lot more options. I think the opportunities here are increasing as the market has slowed for two bedroom apartments around that price – have a look at auction results. Take a look around Windsor, Prahran, St Kilda – good options there for some solid, larger apartments in small blocks with good capital growth potential in the future. And of course are easily rented out.
