Can anyone help me. I want to buy a IP but don’t know where to buy. Does anyone have any suggestions on areas that can give me future capital growth with a rental yield over 6%.
Hi RP – at least your making a start. There are so many factors that impact capital growth and yield. Location is one of them. So which city are you looking at?
Two cities I love are Melbourne and Brisbane. Happy to discuss if they are suitable for your strategy.
Houses in Brisbane fit that build at the moment, i.e. yield + rising market + land component with add value potential…..
Stay away from units around the city though as there are too many being built and the market is being driven by intestate and overseas investors..buy where the locals buy…..
RP, i think you will be pushing things to get a 6% rental return in the current climate especially in Brisbane
We are however certainly seeing an increased demand for our Buyers Agency services from forum members and have sourced some excellent properties over the last few months.
Cheers
Yours in Finance
0-40 Properties in a decade. Email me for a copy of my API interview
Richard Taylor | Australia's leading private lender
RP: Remember, the higher the return, the higher the risk, and risk is volatility.
There are great opportunities on the Sunshine Coast.
Also the Gold Coast…its early but I am seeing great prices on projects including apartments and house and land.
Brisbane in the right area. Bullish on Springfield, Cooparoo,Logan,some inner city apartment areas, Locations in suburbs near train stations.
I am also in the process of buying. May be it’s a good idea to start a topic on this.
I want to buy in Brissy. I think there is always pros and cons about buying in any part of Oz. It just depends on your circumstances. I also don’t know where to buy, but I think all those arguments – which are usually at high level – are good but overall none of the areas is fool proof / guaranteed not to fail.
For an investment to fail, there are so many uncontrollable factors in play. And if you are in there for long term, your investment is more likely to weather all the storms – but then again there are big ones such as GFC.
Anyway, what I wish to say is: provided you are mindful of location location location, in long term your investment is more likely to pay off rather than not. The bigger threat usually comes from our own financial circumstances such as get sick / lose jobs, etc.
Just my 2 cents
Cattleya
(On this website to learn and exchange ideas with other fellow investors. Not trying to sell anything to anybody, though also not preventing any professionals on here from selling their services. Hence I try to be impartial but always welcome any further clarifications / discussions on the topic.)
Cattleya
Here to learn the ropes of property investing & share knowledge, not trying to sell anything at all.
Sunshine Coast going reasonably well, though at present a dearth of renters, whereas a year ago, you could advertise Wednesday and have the tenant move in Friday the same week. Not sure if its oversupply or the number of people moving to the area has dried up, or they are buying their own houses.
Richard,
I can help you with some dual key (auxillary dwellings) properties and duplex. I have the land available and the builder lined up. You would have to purchase the land and enter into a contract with the builder. You would have to find the land purchase while the building was being built. But the result is you get two income streams out of one property which really boosts the cash flow up to those levels of 6% plus. If you get a duplex you can subdivide and sell one half off. These properties I have are in Brisbane
The population growth of Queensland at about 1.9% is double that of VIC and NSW. From a state population (demand) point of view QLD is a long term stayer. In addition to this, the entry price or affordability relative to VIC and NSW suburbs is far better in QLD. Affordability is increasingly becoming a very important factor in purchase decisions now that all major banks have adjusted their lending policies for investment buyers. That being said, the buying caps or price points in South East Queensland are far more reasonable than major capital cities in VIC, NSW, WA and NT.
In terms of potential suburbs, the real key is to become less emotional about the purchase. We find many of our prospective Clients come to us with ideas of investing in units by the sea on the Sunshine Coast, Gold Coast and other areas where they feel they could retire or live themselves. Without going into the details as to why units are typically poor property investments, the objective of identifying a good location is to find an area with very high current and future population growth, well above the State average. Fast growing regional suburbs (close to major capital cities) is always a great place to start. Some Northern areas of the Gold Coast and Western Areas of Brisbane are growing at an incredible rate of population, driven by their physical locations in relation to capital city employment catchments and close proximity to major, large scale, State-approved infrastructure and retail developments. An example of one of these areas might be Pimpama which is currently growing at a rate of about 9.6% p.a. in population (now officially the fastest growing regional suburb in Australia according to the Qld Treasury and Trade Dept.). There is also an approved 80-Hectare Westfield development which takes up one third of the entire suburb that is now approved to go forward. With 11 schools in the local area and 700 local businesses operating within 7 mins drive it is a massive, massive employment hub. The suburb is also strategically located between to of the largest cities in the Country (Bris / GC). Areas like this, available at prices less than half of Sydney, Melbourne, Perth and Darwin make them extremely compelling investment prospects. Couple this with Commonwealth Games growth (proven to be – as per Melb and Syd games historical price movements – 10% over 2 years post games) it makes it almost impossible to replicate anywhere in Australia.
Moreover, there are other areas west of Brisbane and Gold Coast, some of the larger Lendlease estates that provide huge upside over the next 3-5 years. Some of the land prices in these master planned, community driven, brand new estates have increased by $50,000 over the last quarter alone. Yields for even brand new properties are hovering around the 5% mark which comfortably allow for progressive yield compression without rental increases as the market grows strongly (eg Sydney yields are arguably 3.5%). This provides room for growth.
The data quite frankly doesn’t point anywhere else other than South East Queensland. Affordability and population growth being the main drivers. Even Caboolture is on the up and up after years of zero growth due to oversupply. I read today that occupancy rates in this once hated investment area are now just 1%! The supply issues there are well and truly gone but demand remains. Probably a few bargains to pick up in this area due to it being out of favour for so long.
Hope this helps!
This reply was modified 9 years, 4 months ago by Lloyd James Ross.