Hi all,
Long time reader here, and now first time poster! Just wanted a bit of advice/tips from those in the know.
(brief summary of post – wanting to buy investment property on Gold Coast while renting in Sydney)
My partner and I currently rent in Sydney. We are both 30 and sadly have been in the rental rut for too many years (we have travelled extensively and lived overseas for a number of years).
We are not in a position to buy anything at the moment in Sydney as we are looking at starting a family in the coming year.
However, we earn OK money (combined income $190,000) and we have recently started saving more aggresively.
My goal is to work hard for the next few years (3-5) and save/invest etc so that we are in a postion to relocate once we have a young family (relocate out of Sydney).
One option we are considering, is investing in another city now, in order to start building a property portfolio.
This would involve a strategy of renting our PPOR and buying and renting out an investment property.
I have been looking at the Gold Coast, and have noticed a lot of good value in 2/2 bedroom units with parking for around $350,000.
Is this a risky strategy, renting in Sydney and buying an investment property on the Gold Coast (for under $350,000)?
I guess I am just very keen to get into the market, as we have been renting for so long and Sydney is an expensive place!
Looking forward to reading your replies! (if any!!)
Cheers
It doesn't sound like you have a firm long term strategy. Have you done a cashflow analysis on the potential purchases such as the one in Gold Coast? What do the yields look like? What do they look like against the potential for CG?
Also you can easily find decent houses in Sydney around the $350k mark that also give you good yields. I had one investor purchase a house in Marayong for $280k under their SMSF and the rental is $370 per week plus there is scope to subdivide the land in the back (its a corner block).
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
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Hi
Welcome to the forum
The problem with units on the Gold Coast is supply, as in there are lots of them. If you find units in a complex that is in an area somewhat geographically limited or for some other reason they can't build 500 new ones next door that may help.
Also don't forget that BC charges on units can be high.
I like land personally, but plenty of people do well out of units.
Good luck
RPI | Certus Legal Group / PRO Town Planners
http://www.certuslegal.com.au
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Thanks for the reply Shahin,
I guess in terms of long term strategy, the only strategy we have is that we would prefer to build up our investments (property, shares, savings etc) whilst renting in the area we currently live. This is due to not being able to afford the type of dwelling we require in our current location.
We are open to different locations, so it would not be limited to one city/state, however I was looking initially at the Gold Coast as I have read a lot more about that market most recently than other areas.
I would need to do further analysis on any potential properties in terms of yields/CG etc
I am definitely in the early stages but just wanted to jump on here to get the experience of people such as yourself.
Thanks RPI
Point noted re units on the Gold Coast.
I have noticed a few well priced houses up there too. So would not be limited to units as the only option for investing. I guess it depends on the specific location as to what is more appealing etc.
Thanks again
Hi Simon
Firstly welcome to the forum and i hope you enjoy your time with us.
As a Qlder i think an investment in the Sunshine State definitely make sense however just bear in mind the Gold Coast has been fairly battered in regards to price falls over the last couple of years.
We have a house on the water in Palm Beach (which we will probably move back into 1 day) that has certainly come back a little in value but i guess given that we only paid $292,000 for it in the first place are still a Mil or more in front.
As Daryl has mentioned avoid high rise units at all costs as what looks great when you are on holiday doesn't always bear fruit when it comes to investment.
We are starting to source property for clients who are wanting to start their portfolio and have to be honest the GC would not be a place we would look at for our forum clients as an investment area.
To conclude however i can certainly understand why you want to build a portfolio when you are still renting and on good incomes you just need to ensure the structure is right.
As an alternative you might want to also consider a SMSF as Shanin eluded to.
This is probably the biggest growth area of our business at the moment.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks Richard,
Very useful information.
I travel to QLD quite frequently, so am familiar with not just the GC but areas further north. Definitely agree there are a lot of investment opportunities up there.
I guess one thing I am struggling with, is whether it is worth getting into the market at circa $300,000 for an investment property. I have noticed everything from 2 bedrooms on the GC, 3+ bedroom houses in western Sydney, 4 bedroom houses in Central QLD for this price.
In my mind I am thinking that it is better to be in the market than not in it. But is there any good value in that end of the market? (I know it depends on the area, rental returns etc).
I mean, what is better? 2 properties at 300,000 being rented out, or 1 property at 600,000 further down the line? (assumptions taken here, and obviously not a scenario that would be immediately available).
I think the key is to keep researching, I enjoy that aspect of it and need to keep a lookout.
Cheers
I have plenty of clients that rent in the city (due to close proximity to work and/or lifestyle) and purchase properties in areas which lets just say they wouldn't live in. This allows then to live in the area that they want whilst purchasing property that is earning them CG (hopefully) and can claim negative gearing.
I would try looking at houses instead of units.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Hi Simon
Just wondering why you've set your mind on the Gold Coast? Surely the sentence you are saying should be "I want to buy an investment property that has great growth prospects and great yield and is in great demand, and I wish to do so as step 1 in assembling a portfolio that will support me in my retirement"….
In other words, does it really have to be the Gold Coast or have you also considered other parts of Australia that might be less susceptible to the tourism market?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi JacM,
Am not solely set on the GC at all, it was purely the area that I began looking at to start my research.
I am open to most markets as it would purely be for the purposes of getting in to investing, not to live in. So whether its QLD, NSW, SA etc I am more interested in something that is affordable and has potential growth, potential good returns etc. Like you say, as the first step in building a portfolio.
Cheers
Hi Shahin,
Since your first reply I have actually started looking at houses too. I guess the type of dwelling will be determined by location i.e. if looking at Western or North West Sydney, I would be looking at a house in an area with good transport and school links.
Am enjoying the can of worms I have opened and the fact I have a lot to learn and understand.
Thanks again
Since you live in Sydney I would be making some time on the weekend and checking out houses in Western Sydney (around Blacktown). Go to the auctions, get a feel for the demand, demographic, transportation, business, medical centre, shopping centre, etc get an idea of vacancy rates and do the cashflow analysis on these properties.
That way you can feel confident with at least one market.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Hi Simon,
Just read the thread and it seems, to me, as if you are meandering and going nowhere. Each of the points above (all valid I might add) appear to have clouded your thinking. This is probably because you may not have done enough pre-thinking yet.
Given you are not fussed going across the country this really does open up your options. Trouble is opening options also opens yourself to over-analysis.
For what it is worth.
1. Work out how you intend using your property/ies in retirement. Sell and realise profit type strategy or live off rent type strategy. Now those two options really are the extremes of property investment strategy and combination of both is dooable too.
2. Once you have worked out what your preferred strategy is then you have gone a long way to determine where and what sort of property you want thus eliminating some of the distractions you currently appear to have.
3. I would start by finding out which state has the best economic outlook and work from there.
Hope this helps.
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