Advice please - H+L packages - Helidon QLD

Hi folks,

at the risk of making this sound like i'm trying to use the thread to flog property, i am respectfully seeking some opinions and advice.

the story is...

for those who dont know me - i am a residential REA in the north west of Brisbane and deal mainly with established residential property in the $500-$1M bracket. My background is development sites and the unit and townhouse market of the inner north Brissy.

That being said, a former developer contact of mine has brought me some House and Land packages to sell in Helidon which is 100km west of Brisbane in the foothills of the Toowoomba range. The town is a very small community and there isn't much there other than several dozen houses, the usual small conveniences and the highway to Toowoomba.

the properties are the standard 3/4 bed full turn key h+l stuff you see all over now and with pricing just either side of 300k the raw return is about 5.5% (fraction more or less depending on which one).

My questions are:

- for those looking at this type of investment - what do you look for/at when considering a purchase??
- what is it that makes a regional h+l package worthwhile for you
- where do you look to find them
- any other comments or things i should know

i have never dealt with regional development prior to this and I am trying to figure out if this is worth my time and effort and if so, where to take them to get attract purchasers.

the main reason for me bothering is that if i can offload a few of these - there will be several hundred others across SEQ available to me - so am most interested to hear the thoughts of experienced investors as to the worthiness of this type of stock.

I would really appreciate help, comments or criticisms you think are worthy (snide remarks also most welcome)

cheers folks
UC

Hi.

Well i prefer to build new homes my self by sourcing the land and using my prefered builder.

But basically what I look for is a property that i can have a good rental return on but still at the same time have an option to sell if needs be, and to have a market to sell to. What wories me with some regional areas is the resale market is often limited.

urban cowboy said:

Any other comments or things i should know

Click to expand...

Is that cult still operating out of Helidon? Breatharians or something? Nope, found it ... the Magnificat Meal Movement ....

Here are a couple of links for you ... one is old ...
http://www.catholicweekly.com.au/01/may/27/story_6.html
http://www.news.com.au/couriermail/story/0,23739,21700936-3102,00.html

Looks like she's moving out ...

I'm assuming her 7,000 seat Basilica never got approval

And lastly, before I forget ... I remember rumours of shady property deals? Your contact would be able to fill you in on the impact today of all this. But if I remember the cult (did I mention rumours of a mass suicide?) then others probably will too ...

Sorry to sound all negative ...

DJ

Hi UC,

Have a regional investment property in outer western fringes of Toowoomba. Important considerations, were to be able to attract tenants that can obtain employment and are within a resonable distance to a main hub eg. shopping centers, schools, medical facilities etc.

Location can be the key decider. Regonial land is cheaper which attracts FHBs as the entry cost into the housing market is less. Although extra costs & time associated with travelling long distances to work or schools can be significant.

People renting might consider extra travel distance a huge negative when faced with the choice of renting for similar costs in a regional city. This could make the H/L packages less attractive for investors.

Marketing the H/L packages to FHBs might be more successful as they are more likely to consider moving away from the main cities for lifestyle reasons or the chance to purchase their first NEW home at a lower cost.

Don't know much about Heildon except that it is fairly close to Toowoomba which could be a plus factor for FHBs and investors. It might be worth while researching what the SE QLD regional and council plans are for the area regarding future infrastructure, industry, transport, location and impact of planned Toowoomba bypass etc.

Good luck with it all UC. I have enjoyed reading your posts and thank you for sharing your insights regarding the North Bris RE market.

Cheers,
AnnDe

Please note: The above is my opinion only. Please due your own DD.

Thanks for the posts guys, much appreciated.

Letiha - yes you're right resell is a big question mark - though from what i understand Helidon is earmarked to be one of the next growth centres out of all the Twba townships because there is so much land there. Having seen your house at warner on the weekend - i understand completely why you prefer to build your own stuff - your house is much larger and nicer than these. These are basic smaller homes aimed at FHB and local type investors who just want something to own and haven't progressed into the finer points of do it properly themselves.

DJ - mate, she is still there but no one pays any attention to her any more - she holds a cult like status (pun intended) in helidon, not because they think she's God or whatever - but because she does. its a source of much amusement to locals. I believe the basilica was also met with much amusement in council before it was thrown out.

AnneDe - thanks so much for your insight there...it helps a lot. these lots will be 5-10 mins out of Toowoomba and maybe 10-15 at most from the Toowoomba CBD - so that should help a bit. I know Toowoomba and surrounds very well having lived there for a while, but don't know the local RE market and have never worked in h+l in regional centres so have no idea if its worth my while. your points about affordability and researching local plans are well noted - thanks heaps. I guess the main positive is that at around 300k for a new property it should appeal to local FHB's and with raw return at slightly over 5% (and 5yr rent guarantee) they should suit some of the local, more cautious investors.


thanks for your responses!!

cheers
UC

G'day UC,

Hmm - I can't say that much about Helidon inspires me. Yes, it may be 15 minutes from Toowoomba, but you'd better have a car. I can't see too many with bikes making that trip to Toowoomba (a city which I love, by the way). 15 minutes away, but STRAIGHT UP !!

Then again, you didn't mention prices (values) of the properties. It may be that they are low enough to make things worthwhile - I don't research that area for myself, so good luck with your decision,

Regards,

Hi there UC
drove past Helidon on my way to the coast this week and tried to think if there would be something to attract me to the area.
It is very rural at the moment and my only recollection of going into the town is when my youngest daughter attended a guide camp there - which she did not enjoy because of the mosquitos.
There are still a lot of land developments around Toowoomba which have not yet been fully taken up. There is still a lot of development happening around the Highfields area.
Having had to drop rentals to get tenants in Toowoomba, I would be extremely cautious about trying to attract investors - I would think your market would have to be owner occupiers and at the moment the population doesn't warrant huge developments in Helidon. If you have the train go through to Toowoomba, Helidon may be an attractive option.

Hi guys,

thanks for the responses...Raddles, my main concern is the vast array of h+l stock in and around toowoomba - a friend of mine is a town planner their and he is getting swamped with work from berghoffer and his cohorts and some of the big boys from brisbane are playing out there at the moment too...very worrying - i think there is a significant oversupply at the moment and it will be interesting to see how it affects the toowoomba market as a whole.

i agree with your owner occupiers statement - its just a lot harder for me to do being brisbane based and given there is no display home etc it will be difficult to sell...talking myself out of it!!! hehehe

Les, thanks mate...i did ride a pushie up the range once when i was young and fit - and incredibly stupid!!!! never again. the pricing, to be more specific than my original post, is 283k-319k with a guaranteed rental return of 320pw over 5 years (i think) which is what attracted me to them in the first place - for the newbie investor they should be fairly idiot proof and cheap enough for a new premises. But, as Letiha so rightly pointed out resell will be an issue as well - unless the rail does go right through then it may be interesting.


my thoughts are that its about 5 years ahead of its time given toowoomba has so much vacant land still and Gatton is booming as well. when they run out of land in the larger towns, villages like Helidon should do well.

might flick the whole development to our affiliate agency up there and not bother with it myself - too hard.

thanks all

UC

"is 283k-319k with a guaranteed rental return of 320pw over 5 years (i think) which is what attracted me to them in the first place "

Having seen lots of overpriced real estate in SE Qld over the years flogged on the basis of "guaranteed rental returns" then this statement would be enough for me to lose any interest.

If the development is good value, then why is a rental guarantee needed? And is the cost built into the selling price? (usually is). What is the rental "going rate" for these properties. Who is going to rent them? Maybe 15 minutes from Toowoomba, but driving up and down that range road would be a turn off for most people. And there seems to be plenty of property in Toowoomba itself.

and:

"- for the newbie investor they should be fairly idiot proof and cheap enough for a new premises. "

Does this mean that experienced investors will run a mile? Why else target newbie investors?

Buyer beware!!

Sorry to sound cynical.
Marg

UC,

I am an ex resident of Toowoomba - lived there and surrounds for 25 years.

Helidon is no-where near the foothills of Toowoomba, Withcott where other of my siblings live IS and a lot of Toowoomba residents think that Withcott is too far out of town to go - especially with the drive up and down the range. It is hellishly hot and dry. The cops are pretty hot on drivers up and down the range - it has 60, 70, 80 & 90 km limits all over it. If a truck breaks down traffic is delayed for a long time.

Helidon may have heaps of land - nobody wants it So does Toowoomba and surrounds. Rental guarantees scare me the same as free flights to the Gold Coast, seminars where they have land or h+l pkges to help you invest in, OTP high rise anywhere ....you get my drift.

Will it have CG - yes, probably. Do ppl desire to live there - NONE that I know of. It was small country stuff when I went to school near there and 40 years later it is no different. No sales demand, no rental demand, no water views, no cafe culture......no drivers for growth IMHO.

Brenda may have a different opinion, she lives further down the road at Lowood.

Caveat : I hate the country and have just spent a 1 week holiday in Toowoomba in 30+ degree heat - I'm totally over it and hankering for the salty spray from some waves back home on the Central Coast.

But not a good investment IMHO. I'd by in Toowoomba for under $300K and get better rental demand and growth and be 5 mins from the CBD.

Aimy

marg4000 said:

Having seen lots of overpriced real estate in SE Qld over the years flogged on the basis of "guaranteed rental returns" then this statement would be enough for me to lose any interest.
...

Sorry to sound cynical.
Marg

Click to expand...

hehehe...feel free to be cynical - i posted the question so i could get both sides of the argument. If this were a one off i'd agree, but this developer does rental returns on every project and targets mainly investor markets who seem to want this sort of thing - i have done a lot of work for them in nth brisbane and they were doing them there too - so no big deal there IMHO.

i guess it could be argued that the costs are built in, but what i have seen them do is the builder pays the rent guarantee (about 15 bucks per week) instead of reducing the purchase price (fixed price sales) over 5 years that is still not a lot of money(less than 5 grand).

Aimjoy, I am also an ex-resident of Twmba, and of Gatton so am VERY familiar with the area, i know what you are saying re Withcott and it is closer, but Helidon is only around the corner and still only 15mins to either Twmba or Gatton. Lowood is miles away by comparison (Not being derogatory to Brenda - I love the area)

at the end of the day though i agree with you in that i am over toowoomba (the outlaws are there!!) and i'd prefer nth brisbane and the two coasts anyday...i miss the farming, but hey - onward and upwards!

the other thing is that there appears to be an ENORMOUS amount of h+l packages in the toowoomba region at the moment and the competition would be a pain.

Oh, I didn't mean that newbie investors are idiots, i just meant that for some, this maybe an easy way to get in...i personally wouldn't touch them, but it doesn't fit into my bent or plans. More experienced investors would be able to look further and harder and find better deals, that's all i meant.

Thanks all so much for your insights, i really appreciate it and enjoy the diversity in opinions (and cynicism hehehehe) on this forum - great stuff

I sent an email off to our affiliate agency in toowoomba this morning - they can sort it out...the commission aint worth the pain!!

cheers again
UC