Confused with investment

I think having so many new properties available to purchase will keep the prices of yours down, therefore CG will be limited as the market will be flooded. What’s the proximity like to amenities such as train stations, supermarkets, schools etc?

On the upside of purchasing a new property is the depreciation benefits but on face value without knowing anything else, I think you can do better.

Why do you think that you will get ‘good’ capital gains on the house? Are you working on the assumption that if there are a lot of people building then demand must be high and therefore prices will go up? If that is the case, then I would say ‘no’ that’s not a good enough reason to buy a property. I can’t imagine 50% of the complex being NRAS would help.

Why else would the area go up in value faster than the rest of Brisbane?

Right, so my question is, why do you think ‘this property’ will go up more than the rest of Brisbane? If you have $400k to spend in Brisbane, you’d want to spend it in the right place. Some places might go up 15%, while others might go up 5%… that’s a big difference on $400k. It’s more of a rhetorical question than anything, but it doesn’t sound like this is any better than just picking any old house.

I haven’t lived in Brisbane for a while, but I was looking relatively recently. There is nothing wrong with Taigum (which is way closer than an hour from the airport), but there is nothing right about it either. I was looking at Fitzgibbon because it’s at least closer to the train station and eventually will be caught up in the inner city ‘vibe’, but at the same time you have Zillmere which has larger blocks and is even closer. No new infrastructure that I’m aware of, nothing out of the ordinary where you would expect an above average growth. So, you could probably pick a property anywhere within 15km of the CBD and get a similar return.

I’m still very new to this game, but I personally wouldn’t even look at the suburb.

NRAS mean lot of rental, also mean low rate of owner occupy. With high rate of rental and depend how much you buy, CG may hard to get than owner occupy suburb. You also have a strong competition from the NRAS property, mean the rent may lower than it should be. Therefore, your rate of return is lower. Cash flow is important as it help you hold the properties until you have decent CG.

Be wary of anything that is government funded. NRAS falls within this category. Government changes every 4 years. I don’t think you fancy shivering in your boots just after every election to see the fallout to your cashflow position.

I buy whole houses for under $400k all the time. None of this units in body corporates nonsense. Whole houses. Don’t try to make a square peg fit a round hole. There is no point saying “it’s gotta be in Brisbane” and then wondering why you can’t find anything. It needs to be done the other way around. Define a set of criteria and find the locations that match the criteria.

Jacqui Middleton wrote:

Be wary of anything that is government funded. NRAS falls within this category. Government changes every 4 years. I don’t think you fancy shivering in your boots just after every election to see the fallout to your cashflow position.

Excellent point!

Cheers

Jamie

Same goes for Negative Gearing and CGT. If we defer investment decisions based on what a Government may or may not do to a particular piece of tax legislation ( which is what NRAS is- a tax credit) no one would ever invest in anything. I’d also add that whenever legislative tax changes occur, it is almost universally accepted that they are not applied retrospectively. So people who already enjoy a particular tax benefit get to continue to enjoy it.

This Federal Government has made it clear in the June senate enquiry into Housing, that funding is in place in the forward estimates for NRAS until 2017 – which covers the entire 10 year period for all dwellings to be delivered and activated up to June 2016.