2nd Investment Property Location

Hi Everyone,

I just had a few questions that I wanted to get some opinions on.

1) I currently have a property in Redbank, QLD and I am currently looking for my next investment property. Firstly, do you think Redbank will achieve on average at least 5% or greater annual growth for the next 5 years or a different growth rate percentage based on the suburb's position in the property cycle.

2) My second question is where you think out of the following suburbs I should invest in for my 2nd investment property: (Redbank/Ipswich area again), Logan, Elizabeth (SA), Hackham (SA), or Melton (VIC). For my first few properties, I would like to buy in suburbs which have both a relatively good rental yield and good short to medium capital growth prospects so I can leverage into more property to build my portfolio. Therefore do you all think I should buy again in South East Queensland and then in 2 or 3 years to begin purchasing in either Elizabeth and Hackham. Or do you think I should diversify my portfolio ASAP by making my next purchase in Elizabeth or Hackham. The reason I ask this is because I am not sure whether Elizabeth and Hackham are rising markets at the moment or they are still a while way (i.e. 5 years) from their main growth period. Or should I purchase again in either Ipswich or Logan areas as growth is tipped to be great there still for the next few years.

Elizabeth has had some growth IMO in the last 2 years - personally my property has increased from $175k - $190k in that time. Will be re-val next year expect it to be $200k.

Hackam from my understanding also has had some growth, the express way is all but done. Usually infrusture changes increase value around time they're announced and around now when they're completed. Could be possible watch this space to see what happens.

As for picking a properties main growth period, this is the hardest. Especially when determining between a different locations. Best of luck.

You also would likely get better feedback from the forum if you provided your opinion on why you think the areas mentioned are worthwhile, people could then add or comment on your opinion.

Hi Brady,

Firstly thanks for the comments.

The main con I have for Elizabeth is due to the Holden plant closing and whether this will result in a decline in capital growth. The main pros I have for Elizabeth are that even though the manufacturing industry is declining rapidly in Elizabeth, the government and defence industries are having an increasing prominent presence in the Elizabeth area.

For Hackham, I like how the duplicated expressway infrastructure has now been completed. I also like how Hackham is near Christies Beach and with the transport infrastructure, I believe people will like to live there due to the lifestyle preference to live near a beach. In addition, both Elizabeth and Hackham are in areas where population is growing rather well. The only con I have for Hackham is that there are not many real employment drivers in terms of establishment of new industries in the Hackham area.

As I would like to get some short to medium capital growth so I can leverage into more properties, I don't know whether to purchase another one in either Ipswich or Logan areas as there is anticipated to be more growth there for the next 2-3 years. Or should I not delay diversifying my portfolio to purchase my next investment property in Elizabeth or Hackham now as those areas are about to hit their high growth periods within the next 2 years.

Good ol cheap areas

Those areas were my choices too. What makes you look at Melton too? Just price wise?

I like Melton due to the low entry price as well as being on the outskirts of Melbourne. I see Melton similar to the St Mary's of Sydney.

What areas do you have property at Moneyman_85?

As I am intending to purchase my second property early next year, I am not sure whether to buy my 2nd property in QLD or SA. I think Logan and Ipswich will get higher rates of short term growth with growth in Hackham and Elizabeth to grow more in the longer term. I would like to get short term growth so I can leverage into more property but I also like the attractive yields of Elizabeth and affordable homes in Hackham that are close to the beachside of South Adelaide.

I have one in logan (villa) and one in strathpine (unit)

Strathpine isn't mentioned much on the forums but i wanted one in the north of brisbane so I'm not concentrated on one area.

Is there much between Melton and melb city? I only saw that place when I did a wide search for $250k and under. Maybe search future infrastructure plans

Hackham was chosen from Margaret lomas 20 must ask question book lol

But the population prediction is why I chose Brisbane over Adelaide

Anyone correct me if I'm wrong tho.

The prices between Melton and Melbourne city are pretty far apart.

I think Hackham will do well in the long term as the area will gentrify and as the government housing gets bought up you will see the changing demographics.

Do you think I should buy in Brisbane again such as Logan as there is still quite a lot of growth to tap into.

Given the circumstances I would choose another state preferably VIC simply because of the past growth. Cheers

Proper Property said:

Hi Everyone,

I just had a few questions that I wanted to get some opinions on.

1) I currently have a property in Redbank, QLD and I am currently looking for my next investment property. Firstly, do you think Redbank will achieve on average at least 5% or greater annual growth for the next 5 years or a different growth rate percentage based on the suburb's position in the property cycle.

2) My second question is where you think out of the following suburbs I should invest in for my 2nd investment property: (Redbank/Ipswich area again), Logan, Elizabeth (SA), Hackham (SA), or Melton (VIC). For my first few properties, I would like to buy in suburbs which have both a relatively good rental yield and good short to medium capital growth prospects so I can leverage into more property to build my portfolio. Therefore do you all think I should buy again in South East Queensland and then in 2 or 3 years to begin purchasing in either Elizabeth and Hackham. Or do you think I should diversify my portfolio ASAP by making my next purchase in Elizabeth or Hackham. The reason I ask this is because I am not sure whether Elizabeth and Hackham are rising markets at the moment or they are still a while way (i.e. 5 years) from their main growth period. Or should I purchase again in either Ipswich or Logan areas as growth is tipped to be great there still for the next few years.

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PP, quite a few of our properties have doubled/tripled in value over the course of a decade.. Rents on those have doubled & some tripled also.

I believe we have attained that growth because early on in our investment journey we decided to target / purchase in areas that had recently been approved for or were in the planning stages for gentrification.

We looked for the following 4 flag sectors injecting money. -

Government, Commercial, Retail & Private sectors

We discovered this ultimately uplifted & beautified the area resulting in people's attraction thus moving in and creating demand.

We have found this to work very well if you are looking for short to medium term capital growth so as to leverage against and build your portfolio faster.

Typically these are some of the signs we looked for where sectors were injecting money -

A/ Local/State/Federal Government. ie Major arterial roads, Govt Depts locating to area, Street Scrapping, New Public Transport, Recreational facilities, Hospitals/Medical facilities, Suburb Redevelopment Authorities being formed. etc

B/ Big Multi National Retail & Commercial type companies. ie Major Shopping Centres, McDonalds Hungry Jacks, KFC, Bunnings, Harvey Normans, Good Guys, etc. These companies spend $Millions on market research before going into and setting up shop in an area. If there was no current or immediate future demand for their products and services they would not be moving in, so leverage off the back of their research.

Sources for information as part of your due diligence - You can check out all the federal/state/local government planning & development websites at this one convenient link http://www.oultwood.com/localgov/countries/australia.php

Other sources I use to gather info are from all the various big multi-national company websites, local newspapers, community news, local businesses, and people in the area.....general networking etc.

C/ Private People/Investors. ie Owner occupiers and Investors bowling over old houses then rebuilding new modern homes and redeveloping town houses / villas.

Get out and about. Jump in your car and drive around the area. Better still is once you're in your prospective area hit the streets by foot. You will see so much more on foot than by driving.

I hope this provides some food for thought.

Great info Rick!

Especially the link!

I know the Melton market quite well as (and I really don't want to admit this!) I was a Melton resident for a few years and still have houses there. I don't think CG will be all that spectacular over the coming years.

To use my old PPOR as an example - we were lucky when we built in Brookfield right before the market went nuts in about 2009. We built a basic cookie cutter house for $250k including land. I think it was about 12 months later we got a bank val done for $381k then it just went downhill from there where at one stage we would have been lucky to sell it for what we paid for it.

Same with rents - at the peak we would have been able to achieve about $350p/w in rent, during the low point that was more like $260-270p/w. Jan this year we rented it out for $300p/w.

In the past 12 - 18 months the prices are starting to rise again and I think if I were to sell we'd get around the $335k mark though looking at re.com.au there seems to be some anomalies in Botanica Springs where they're similar spec to my house and they're asking high $300's so I'm keen to see what they actually sell for.

The reason I think Melton will stay quite soft over the coming years is the council and developers don't quite seem to grasp the supply vs demand ratio for keeping prices stable or allowing them to rise. There's so many new developments being established which is keeping the prices down and still a lot of vacant land to be developed too - not just in Melton and surrounds but those big paddocks between Caroline Springs and Melton. As I drive past I see there's a few new builds popping up around Rockbank.

I think Melton is still a fair way off gentrifying too - still very much has that bogan stigma attached to it and just talk a walk around Woodgrove and nothing has changed. Except Woodgrove which had a massive extension built, so maybe an indicator of things to come but I don't see anything else happening at the moment.

If/when they eventually electrify the rail line to Melton that might have an impact on things but the dual rail line needs to be built/finished before services increase or improve. Sunbury would be a good indicator of this as the Sunbury line was electrified a few years ago after being v/line.

I could be wrong about Melton in the medium term but I don't think so. There a lot of other places I would invest in now that are above Melton on the list.

Love this strategy Rixter! A mates Dad bought an Edwardian in Fitzroy in early 1990's, you can imagine what he paid for it and what it's worth now... that purchase alone would be enough for most to retire on. Probably the best strategy there is when you get it right.