Hi everyone! I’m totally new to property investment through negative gearing. I would like some opinions before taking action and would greatly appreciate any comments.
I am currently looking at purchasing a 2 bedder new development in Idalia, Townsville OR 1 bedder at Bowen Hills in the Brisbane CBD area.
i understand that Townsville is undergoing a lot of development and i am lead to believe that the capital growth will be good. As for the Bowen Hills apartment, the tenancy will probably be always good however the capital growth may not be comparable to that of Townsville. What is your opinion on these areas and which do you think is a better long term investment?
Thanks for your time and I look forward to your comments.
Lizzie
Hi Lizzie
With the Bowen Hills property is it an off the plan property or established.
1 bedroom is the total square metreage of the unit over 50 square metres ?
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hey Richard,
The Bowen Hills property in CBD Brisbane is off the plan. It is a 1 Bedroom of 55.0m square that cost about $381,000.
The Idalia Townsville one is also off the plan. It is a 2 bedroom apartment $359,000 for a total of 87.24m square.
Cheers
Reason i ask is we are seeing a few Off the Plan properties in Brisbane value in at less than the purchase price and havent seen that in years.
Few developers trying to lock in sales in order to get finance and yet the valuations are coming up short.
Personally i would be buying a property ready to go rather than OTP in the current finance climate.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Lizzie,
What is making you go for a 2 bedroom appartment in Townsville?
Just I have been researching Townsville for a good few Months now and for that same price you can pick up a 4 bed 2 bath house in a nice suburb. Minus the body corporate fees.
Cheers,
NathanLizzie,
I am trying to sell a house in Townsville. Let me give you a clue as to house prices.
Going back a year there would be about 4-5 pages of houses for sale at Kirwan, now there are 14 pages.
Houses that were $300,000 are now $250,000. I suggest you buy in Brisbane, but it is also dropping, so maybe don't buy..Good Luck
Richard and Nathan, I did hear from another member on this forum that I should negotiate for a better price based on the current market. I will have to talk to Blue Wealth, the property investment company who recommended the apartment.
Gotta say this is pretty tough as I’m new to property investment and I am located in Sydney..
WJ Hooker, thanks for giving me a good idea of the house prices in Townsville. I will carefully weigh in all factors. There’s an article I read that says properties in Queensland will continue to slump and may never recover in 20 years. I’m really not sure how true that is. People are always predicting a crash in properties:
http://www.moneymorning.com.au/20111010/queensland-housings-100-year-slump.html
http://www.moneymorning.com.au/20110829/aussie-house-price-falls-start-to-bite.htmlI wonder if we end up talking ourselves into doom..
As Warren Buffet once said… "Be greedy when others are fearful, and fearful when others are greedy"
And in my opinion the majority seems pretty fearful to me! I reckon there are some excellent bargains out there, even if prices do drop a little more.
Hi Lizzie,
for what its worth, and I certainly don't profess to be an expert, I would seriously consider the advice Richard has given you in relation to buying OTP at the moment in this environment. He comes from a finance background and has intimate knowledge of the Brisbane market having a sizable portfolio there himself.
There will always be someone spruiking doom and gloom in the market place and its your responsibility as an investor to separate the good from the chaff. Some might suggest that a spike in stock on the market and drop in prices as suggested is taking place in Townsville at the moment represents a really attractive buying opportunity. I for one believe there are some real opportunities in regional Queensland and am extremely confident about its future prognosis so much so that I intend on my next purchase being in regional Queensland.
It's great you are seeking guidance on your journey, just be careful who you take advice from and make sure the advice you are receiving isn't to the benefit of that particular party. I always get nervous for people when they say they've been recommended a property by in an investment group especially OTP. I think you must have an intimate knowledge of that particular market when purchasing OTP and perhaps not the avenue for the new investor.
If you are new to property investing perhaps it may be really beneficial for you to just take a breath, stop and learn for a while. Get some books, read some magazines, talk to people, get involved in forums and go to some free seminars just to see what other people are doing out there and develop a strategy. You'll be able to then take control of your own decisions and know exactly where your money is going and be responsible for those decisions.
Remember, your first property purchase has the potential to set up your whole portfolio so don't waste this opportunity or hand the responsibility over to someone else who at the end of the day will take no responsibility if the property turns out to be a poor performer.
Best of luck,
Jack
Hi Lizzie,
Congratulations on being in a financial position to invest! Firstly, never buy or not buy based on an article, remember the people writing the articles quite often have less experience in property or more particularly the areas you are looking at than you may.
Secondly, Don’t just buy for capital growth and have to pay money each week, and don’t just buy for cash flow (high yield) buy for both! For those that say they don’t exist simply don’t know what they are talking about.
Research Research Research is the key. Jack (above) has spent months doing his due diligence on a regional centre in QLD, when he buys, he will know exactly what he is getting himself into, therefore, he wont be awake at night second guessing his decision. Ask the agent that is selling you the units if they have purchased in the area and what the purchase was, and how does it compare to what you are buying.
Growth drivers are the key to capital and rental gains, find out exactly what they are, use government websites etc, read companies Environmental Impact Statements etc. Also remember the past is no indication for the future, unless there are synonymous signs/activities.
Good luck!
Hi Richard, Jack and Josh,
Thanks very much for all your insights. I too believe I must do ample research before venturing into our first investment. I had been checking government websites and talking to a few people who are familiar with investing in Townsville and Brisbane. Interesting thing is I got all sorts of advices…some even contradicting. So you’re right.. developing one’s own strategy is really important.
Obviously the above steps I had taken are not enough. Earlier today I had another discussion with my husband, we decided to hold off and educate ourselves more. After reading your comments, I am even more convinced we should better equip ourselves rather than trusting in an investment group blindly. Its not to say those groups could be bad or good.. it is more about taking things into our own hands and like you said be responsible for it. Its not an easy journey since my husband and I are so new to these. if you guys do know of reliable workshops or seminars in Sydney, please let me know.
In addition, if you don’t mind, can you all share here about your own personal strategies based on your financial situation?
Again, thanks for replying my thread! I really appreciate your time.
nguli wrote:Hi Lizzie,What is making you go for a 2 bedroom appartment in Townsville?
Just I have been researching Townsville for a good few Months now and for that same price you can pick up a 4 bed 2 bath house in a nice suburb. Minus the body corporate fees.
Cheers,
NathanThanks Nathan, that gives me a good idea on the prices.
Lizzie i dont like the sound that you are buying through a property investment company who are no doubt earning a sizeable commission from the sale.
Why dont you Contact someone like Andrew Allen from the forum who is a Buyers Agent and who specialises in the Brisbane area.
At least that way you will end up with a good value property in an excellent growth area.
Let me know if you need Andrews contact details.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Richard, thanks very much. Please feel free to send me Andrew’s contact details.
I attended a workshop held by Property Women yesterday and interestingly met a lady who had bad experience buying OTP from another investment company. The property did nothing for her since 2004.. Thanks all of you who gave your 2 cents.. it gives me a better perspective on how to embark the journey of investing.
Andrew website is http://www.allenrealestate.com.au/
Phone # 1300 443 581
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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