Hi all, This is my first post here so please be kind. Have been sitting on the sideline for ages and have finally had a need to speak up. Am not too experienced yet at this Real Estate game but am getting more comfortable with it. Great Web site. Now onto business !!!
The better half and I are looking at this 1 Bedroom unit in a complex of 70. Complex is 3.5 years old. The complex is is not a skyscaper. It has 3 storys of units built around a pool. The units size is 65m2 with a balcony of 15m2, and one secure car space. Its 2km from the Brisbane CBD very close to the river and all public ammenities. We could get this unit for $210,000.00 currently rented until Apr 06 at $220.00. The complex is managed by friends of ours and they have four, one bedroom units in this complex that are getting $330-$340 p/w rent with a $8000.00 furniture package in them. That would put this property slightly positive after all said and done. I know we need to knock some of the rent off to allow for furniture renewal. My concern is that are these 1 bedders good for capital gains? If we bought this unit it would put us at an LVR of 73%. I have one other investment property plus a mortgage on our primary residence.
The units in this complex first came onto the market from $165,000.00, and as we all know we have come through a pretty big boom in Brisbane, yet the property has only increaed an average of 6.3% per annum. Is this common with 1 bedromm units in a large complex. Should I be using my money on a different type of dwelling….i.e a 2 bedroom unit in a block of 6.
This is making my head hurt, please advise.Typically they haven’t performed as well in the CG area.
But I have been reading a lot about the new demographics and some writers are suggesting that there are more and more single people staying single. I wonder if this will lead to a greater demand for this style of accomodation?
It sounds like a pretty easy rental and quite affordable. But I have always had a preference for 3-4 bedroom, well located, middle class homes for capital growth.
But I am no expert so please don’t act on my advice!
Cheers,
Simon Macks
Residential and Commercial Finance Broker[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Thanks for the reply SImon.
I agree with you regarding the CG of the 3-4 bedroom joints. The trouble is getting the decent rents versus purchase price on these type of well located houses. I would not have even looked at this 1 bedder except the fact this manager friend of ours showed us the rentals fully furnished units are fetching in this complex. I wouldnt have believed it if they hadnt shown us.
Thanks again.
Hey pkluge,
QUick reply- some may recall that I had a one bedder in “Uni-Lodge” complex- Margaret street in the city. Difference being they are extremely small. Good bit of cash flow, but capital gains was not going to happen. Had it for cash flow and was going to use it for self managed super. Sold it as I went into another venture.
Anyhow, thats an example- sounds like you are wanting the cash flow and the capital gain?? That would be nice yeah.
Really depends on whether you want capital gain. Simply, no, the smaller properties like that will not attract as good a capital gain as a larger dwelling/unit.
As you suggested- going a two bedder may be the way to go. And watch the amount you get slugged on finances- it all looks great but then it may only be a 5% return after everything is taken out. You will be suprised how much the rates are in there plus bc and maintenance etc.
hope this helps
http://www.jenterprisegroup.com.au
data.communications.entertainment systemsYour really not going to get the best of both, CG & Cashflow I think you need to asses your situation and decide on what you Need in the present situation, not what you want.
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auHi there
I am a newcomer, as well, so no expert,yet.
How about you look at other properties, before you make your decision to buy ? Look at the figures for them, and that will help you in making your decision.
My head hurts too…
Hi Pkluge
I am based in Western Suburbs of Brissie and have finance many of the single bedroom units in Brisbane CBD and surrounds.
Also i finished developing 24 1 bedroom units in Taringa at the start of the year and can give you some feedback on price v yield.
If you want to email me the address i can give you an honest opinion.
Cheers Richard
[email protected]
http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Being 1,2 or three bedrooms makes little difference if the product is in the right position, but you need to have the furniture package in it to maximise the rental return. Also as the unit is 3.5 years old the internal depreciation will be almost done, so the furniture package will help with the deprecitaion. Regards
Property Acquisitions for developers and investor from; Kevin
pkluge,
I agree with most of what has been said. rarely get positive geared/cash positive property with sustained capital gains. Also new or near new for depreciation. I have sent you an e-mail regarding a unit development I am involved in which may be of interest if cash/gear positive is what you are looking for.
Steve Bhi pkluge
Forget the hurting your head this comes with any real estate.
the rule is 1br first, 2br second, 3bd third, then town houses and the free standing houses next.
1bd is a very good investment if in the right area.
I’m a little bias here because I look for growth not rental maybe a couple of people will give you a different view at the end of the day you must organise your mix to suit you.
You haven’t given an area so that makes it difficult.
my recomendation is chat with a local real estate to find the following.
1.is 1, 2, 3, bdr in demand.
2.whats the return
3. do they have access to rp data
4. cost of managing your units
5.work up a relationship with your local real estate using there systems(and they have very good data bases) to decide what is required for your area.
if then 1br are required get involved I just put 19 x 1 brs in a area here in sydney that needs 1 br they sell a lot quicker then any other.
reasons
1. below the $330,000.00 thresh hold for single lending
2.if 60 to 65 sq 2 people can live in ok ( I could when single)
3. low over heads. starta by fsrI like 1 brs but they must be in the right area and aimed at the right market.
here to help
pkluge, You really need to analyse your situation to seeif this type of investment suits you..
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auOriginally posted by elysean:Being 1,2 or three bedrooms makes little difference if the product is in the right position, but you need to have the furniture package in it to maximise the rental return. Also as the unit is 3.5 years old the internal depreciation will be almost done, so the furniture package will help with the deprecitaion. Regards
Property Acquisitions for developers and investor from; Kevin
The fact that is in only 3.5 years old gives it GREAT depreciation. I’m getting good depreciation on a house that’s over 100 years old.
cheers
v
That depends on how the depreciation schedule is structured & what sort of renovations you are maintaining in the property..
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.au
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