Hi Guys,
My partner and I want to buy an investment property preferably 4 bedroom, 2 bathroom and 2 car spaces.
We are unsure where to buy as we don't know what to look for regarding the capital growth and rental yeilds.
Currently our PPOR is valued by the bank at $405,000 and we owe $240,000 and have a combined income of $140,000 per annum as well as some savings.
What are your opinions of investing in QLD and Vic, also with Defence housing and the NRAS scheme?
Any advice would be much appreciated
You need to educate yourself and buy in a location based on your own research, not what someone tells you.
If you watch Steves November market update he advises against Nras and defence schemes, and almost against Vic altogether lol
Determine what suits you personally and how much risk you are comfortable with
Blade with the equity position you are in i think there are a variety of options.
Certainly if the NRAS property is used to pay down the PPOR debt even quicker i don't have a problem with this and then look at a property with good capital growth to balance the portfolio.
As i say to clients so often structure is paramount here to maximise your equity position going forward.
Set up correctly you could certainly build an excellent portfolio over the coming years.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks for the information Rick sta and Qlds007. We bought in Gladstone a little before the boom we are unsure about Gladstone at the moment with all the housing development that has gone/starting to go ahead as well as all the camp accommodation provided for workers. We have thought about Townsville and Mackay also. What are considered to be good capital growth percentages?
Thanks for the information JacM
As Jac says- don't get too stuck on a particular type of dwelling as you may miss an opportunity by wearing blinkers.
I have a VERY small 1 bedroom unit that has had amazing capital growth and a good yield.
Read some books, ask more questions.
Why are you targetting those areas? Look for CG drivers- infrastructure, population growth etc etc.
What is your long term goal? What do you wish to achieve by buying property?
Thanks for your response Catalyst. We really want to capitalize on the equity we have on our house. We are both young and have good jobs so we want our money to start making money for us so it will help us with our future.
We don't want a get rich quick investment we are in it for the long haul and want our property port folio to grow we just need a start somewhere so any advice is much appreciated.
We thought Mackay because of the surrounding mines around the area, but are worried about the future of coal. Townsville we thought because of the diversified economy.
We have also thought about Ballarat because of it being easy access for Melbourne via Train and with the Victorian government promoting a policy of decentralization should see more growth within the Ballarat area with residence living in Ballarat but commuting to Melbourne (whether this happens is a different story).
Thanks guys.
Thanks for your response Catalyst. We really want to capitalize on the equity we have on our house. We are both young and have good jobs so we want our money to start making money for us so it will help us with our future.
We don't want a get rich quick investment we are in it for the long haul and want our property port folio to grow we just need a start somewhere so any advice is much appreciated.
We thought Mackay because of the surrounding mines around the area, but are worried about the future of coal. Townsville we thought because of the diversified economy.
We have also thought about Ballarat because of it being easy access for Melbourne via Train and with the Victorian government promoting a policy of decentralization should see more growth within the Ballarat area with residence living in Ballarat but commuting to Melbourne (whether this happens is a different story).
Thanks guys.
Hi Blade328,
One really important thing that I always mention to people who are getting started in property investing is to try and leave all emotion out of the purchasing process, instead relying on the numbers to decide whether to invest in a property or not.
As Catalyst pointed out, he/she owns a 1 bedroom place that is a good investment and a valuable asset to their portfolio.
My partner and I own properties in rural SA, including a township that most people who we speak to in Adelaide say "Why would you invest in (town)?" However, they are cashflow positive investments and suit our desired portfolio nicely.
Hope this tip helps you in beginning to establish your portfolio.
Kevin.
Not sure why you have predetermined a 4 bedder. You want to buy whatever is in demand, in a locale poised for good growth. Maybe that's a 4 bedder, maybe it's a 2 bedder.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Blade328 wrote:Thanks for your response Catalyst. We really want to capitalize on the equity we have on our house. We are both young and have good jobs so we want our money to start making money for us so it will help us with our future.We don't want a get rich quick investment we are in it for the long haul and want our property port folio to grow we just need a start somewhere so any advice is much appreciated.
We thought Mackay because of the surrounding mines around the area, but are worried about the future of coal. Townsville we thought because of the diversified economy.
We have also thought about Ballarat because of it being easy access for Melbourne via Train and with the Victorian government promoting a policy of decentralization should see more growth within the Ballarat area with residence living in Ballarat but commuting to Melbourne (whether this happens is a different story).
Thanks guys.
Personally I would not buy into an area solely on the hope and prayer that a particular event occurs (such as a new rail line being built that is not yet budgeted for by the government). I am comfortable buying in based on what the town already has going for it, and the stuff that is likely to come to town (such as a new freeway, or a new train line) is icing on the cake.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi Blade,
I think you are looking at this the wrong way. Try working backwards to determine what property strategy works well for what you want to achieve.
Now NRAS is a type of strategy. It is a great strategy but its not for anyone and not any type of NRAS property is good. It has a lot of benefits and certain restrictions so just ensure that what ever strategy to you choose – these benefits (which the sales guy will give you) but more importantly the restrictions are explained to you by a professional and not the sales guy plugging the property.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Hi Kevin,
which rural towns in SA do you have properties in and are they rented ok – I mean you don't have any long vacancy problem?
I remember reading in the Australian property magazine, which said that SA in general currently has a huge oversupply of housing stocks. In fact so huge that all housing construction could stop for 5 consecutive years and it would still not affect the demand. Do you agree?
To test that message, I jumped onto realestate.com.au and pulled down a number of houses for sale from over a dozen suburbs across SA. What I noted was a high percentage of the houses had photos that clearly show the homes are vacant..
Hope to receive comments from others as well.
Jenny
Hi Jenny,
At the moment we're investing in Port Pirie in SA. What separates our properties from others is that they are nice, brand new builds with open plan living areas, split system air conditioning and no asbestos rather than 30+ year old "dumps" that are common in the rental market there.
Most rental listings that I've seen have had their photos taken whilst vacant to create the impression of more space in the rooms.
Kevin.
Kevin, and you don't have any lengthy vacancy when you advertised for tenants? I see alot of homes there are for 'first home buyers', are these properties new (or nearly new), do you know? These properties seem to be ok; they don't look too old.
And did you manage to get 80% LVR on these properties? I am hearing that small town like this, banks require at least 70% of the house value, rather than the standard 80%.
Thanks.
Jenny
Hi Blade,
As others have said it is important that you spend some time educating yourself so you can make decisions and control y our own destiny. Relying on the advice and guidance of others means you are in their hands. For DHA and NRAS, to a certain extent, fall into that category.
Having said all of that – Jac is spot on. Don't confine yourself to a 4 X 2 as 2 X 2, for example, may be a more suitable investment in some localities. Leave the type of property blinkers off and focus more on your long term objectives, from this the type of property will be identifiable as will the location.
PS most 'experts' are giving a general thumbs down to Vic. Mind you every state will have pockets that perform well. See if you can find these.
Thankyou for your information Derek.
Hi,
Registering 5.8% rental yields for houses and 6.2% for units, Darwin ranks as having the highest returns. Also, in 2012, the city experienced a 16% increase in house rent prices and a 20% increase in unit rent prices. The next best performing city is Perth.
Out of the states you mentioned, I would choose QLD, as Brisbane has shown very promising growth indicators, over the last quarter.
Cheers,
Emil
Sunbuild Invest
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