@goosehead FYI I liked your question just because and @benny I liked your promise to investigate – thanks. In my view (and other forums) the like button is more useful as it encourages positive feedback. The number of positive interactions gives a good guide to trust in the arena. If people dislike just because they have a differing opinion then it discourages open debate and makes it risky to hold an opinion on anything. The purpose of the forum surely is to encourage that debate.

I would only ever dislike someone’s post if it was rude, or inflammatory or suggesting something illegal. Here is appears to be being used for some other agenda, I am not sure what. I think the use of reporting poor posts to moderators who can caution, remove posts or ban users generally achieves the same thing.

Would love to see the forum continue to thrive and improve and this could be a useful opportunity for some kind of housekeeping perhaps.

A little – I have done Battle Axe style subdivision before, and currently working with a few clients on that specific property type, so helping with due diligence to ensure we buy the right property so that can later do exactly what you have described. It is a great strategy and I encourage you to go for it, as long as you do your research and be patient.

This is one example, client is nearly finished subdivision process for 1 rear block – with a 500m block at front (minimum allowed in this area) the rear block has a 1m service handle plus an access easement on 2m of the front block so the driveway will be 3m wide. He will build (in this case aged care) villas in the back he is a certifier and knows he can get higher density in this particular case. The 1m handles work in some councils, not others, and remember you will need an easement for the benefit of the rear lot.

http://www.realestate.com.au/property-house-nsw-north+nowra-118515839

I think in a strongly rising market you could win with this strategy, but be careful to only commit to blocks you can afford to settle and hold, because if something (like APRA, GFC etc) happens in the mean time you could be left holding an asset you can’t sell quickly. The profits will be small given costs of sale as mentioned above unless the market is also rising. If you are into that sort of thing and already building houses why dont you go one step further, buy a big block, do a 3 or 4 lot subdivision yourself, put in services, get the full profit margin on the blocks then sell a few and keep and build on a few? Just sayin…

Interesting to look back at this thread now we have a new PM. Seriously hoping Turnbull can put a good show on, develop some new technology industry capacity in this nation and get a bit of direction going. We don’t need a new PM every year or so.

Originalsinner wrote:

Check out Beenleigh. Seems to be a bit happening in the area.

Fill us in @originalsinner what is the word on the street in Beenleigh?

Nick wrote:

Hi Guys,
I have been dabbling at the idea of getting into the property market. But I have to admit, I was one of the people who said “The market is at its premium now, I will wait when the price declines”. Truth be told, that day has never arrived.
So now, I have decided to put my foot down and look at buying my first investment property. I live in Sydney, but I believe that Brisbane will be the best place to start. Ideally, I would like a property that will pay off my interest only loan through, rental revenue. I know this is achieved able with apartments, but is it possible with houses? I have a borrowing capacity of 700k, ideally I would like to spend no more than 500-550k, for my first investment property.
What suburbs, in Brisbane, should I be looking into that will achieve these results? Or should I be looking in Sydney? I personally think Sydney is over inflated, do people share this opinion with me? Should I hold off and buy a property in Sydney, when the price starts to cool down?
Any insight into helping me get my first investment property would be much appreciated.
Thanks in advance
Nick

Gday @nickstazzy welcome to the forum. Good to hear your honest thoughts on the market, and to be honest I meet lots of people in your situation. The people who wait for many years to see a major market fall are often disappointed. On the other hand I also know a few who purchased right at the end of the current (and previous) Sydney boom and saw 3-4yrs of zero growth (or mild losses) and this is also disappointing. The opportunity cost of not getting some growth in those early years means it matters – if you take a 30+ yr outlook you can buy anytime, but if you need to try and get some growth in the first 2-4yrs to leverage, and get more property then the location of the fist one counts.

As a general rule Sydney media and Sydney folk have a very Sydney centric mindset when it comes to property. I don’t blame them (I was born there and spent the first 30 yrs of my life there before moving to paradise) however once you open your mind to the alternatives there is opportunity in multiple locations around the country. I started in my early twenties investing interstate and don’t regret it one bit. Since then have bought across the country when it suited, and currently doing deals on NSW South Coast as the Sydney ripple effect plus loads of retiring baby boomers make it great timing to do so. Townhouses in central Wollongong suburbs around $500k are so popular with local families and the topography/geography means oversupply isn’t really ever possible. Further south to Shellharbour you can get freestanding homes with development potential (like a dual occupancy) for that money. Yields are lower to begin with but instant 100k equity boost if you get it right.

As others have mentioned South East QLD as an option, I would agree in general terms the timing for Brisbane and Gold Coast is much better now that Sydney, and have been personally travelling to Tweed and NE NSW for investments recently too. If you want to achieve cash neutral payments on a mortgage there it is possible if you know what to look for, perhaps moving a couple of suburbs further out from CBD might give you the balance you are looking for – basically the further out you go the cheaper the homes and the higher the yields. The ratio and total spend is up to you. If location is everything then be happy with units but make sure the location is limited in supply. I have purchased waterfront units well under your budget that were cash neutral (6-7% gross returns, low bc) for clients, but in less desirable or more affordable areas that some folk would avoid as they are by no means trophy suburbs so it totally depends what you are hoping to achieve. Zoom out and consider your goals, and the strategy must fit the goals, not the other way around.

I agree with Richard @qlds007 torrens title or greater land component in quality suburbs will be great from a capital perspective but yields might be not quite what you are hoping for so a little extra effort might help – either with a cosmetic renovation or granny flat or other development. (not sure if this is what you were referring to Richard?)

Geoff wrote:

Hi allI live in Perth and currently looking at buying and investment property in DarwinHas anyone brought a investment property in Darwins Muirhead Breezes, im looking to buy an investment property up there , I have a few concernsConcerns include, like Perth, property, jobs etc are going backwards at a rate of knots due to the downturn in mining, whilst I agree Darwin has a lot going for it, agriculture, defence etc, but, it cannot remain immune from the downturn, I believe that next year, it will still continue to come off, so a property worth $600K say might only be worth $550K or thereabout in 6 months, and then, how long is a piece of string for recovery – I do understand it’s a long term investment but wouldn’t it be better to adopt a wait and see approach re-visiting investment in the area say around April next year to see how the market is travelingAny advise would be much appreciatedRegardsGeoff

Welcome @geoffslingsby – good on you for being prepared to invest, and even consider interstate. I love counter cyclical investing, meaning its great to buy when no one else wants to as you have the option to get in cheaply. However in a falling market if you get in too early you will be punished, and the opportunity cost of capital losses that need to be recovered is quite expensive. Personally I think its too early to invest in Darwin. I would be taking the wait and see approach. I would want good data showing that it had bottomed out, at the very least even if it hasn’t started rising yet. Would it not be worth considering another market in the mean time to catch some rises and then in 6-12 months re evaluated Darwin? Just a thought.

Great spot for a corner block! But that is a big decision to leave to others!

To start with, you need to answer a few questions:
1 – What are your long term goals
2 – Subject to (1) what is your preferred timeframe for holding this property
3 – What does the market prefer in terms of both value and rental
4 – What does the zoning allow
5 – What can you afford

All of these will help inform your decision, failing that I would consider talking to someone experienced in running development feasibility studies. One option might be twice as profitable as the other.

What @terryw said – if possible buy a place for yourself debt free, which avoids paying out rent and gives you some life stability after a big change, then set up 80% loan with offset (talk to the brokers) and set some aside as buffer, use the rest as deposits, get new investment loans on any properties you buy and it should all be tax deductible. If you get the purchase mix right (ie invest in areas with a blend of cash flow and growth) you might not lose your entitlements.

@jones4130 I posted in the other thread too and would agree with @benny and @qlds007 that the most important thing is to do independent research. This is probably way more important than the actual suburb you end up purchasing in. If you are doing your own research and are happy that the values and rent returns stack up, then you have nothing to worry about.

BUT If you have been given a sales pitch by a company who is flying you up and only showing you there own properties you are being deliberately insulated from the real world. Down the road from a new H/L pack you buy could be existing home worth 100k less. This is how they work, we are not trying to sound conspiratorial, this is happening to people every day. It isn’t about Coomera per say, it is just one example of an area where these spruikers have done their deals in recent years. This has also occurred in Gold Coast, Melbourne CBD, and other locations. The area isn’t really the problem (although too much of these deals can ruin the market in an area for a while) it is really just about being well informed. Consider the basics, the laws of supply and demand. Housing always comes back to that.

They are trying to warn you to save you this potential heart ache, that is all.