Brisbane Flats

[cmpalmer]

Friends!

I am looking into adding a Brisbane 1 to 2 bedroom flats and found some decent options.

http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=102771887&t=res&ag=&cu=
http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=102704218&t=res&ag=&cu=
http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=102626288&t=res&ag=&cu=
http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=102796958&t=res&ag=&cu=

Does anyone have some opinions on the areas I should consider? I looked at the highest median rents and that was one place I was going to start. But there are some nice 1 bedroom flats renting for 240+ per week.

Chris

 

[Jamie]

Hi Chris,

A couple of quick thoughts:

Yes, the yields look good - but the outgoings are astronomical in some of the more boutique apartments blocks/serviced units. Lets take the last example you listed above (One bedder in the Manhattan):

Rent is $13,000 per annum (assuming 100% occupancy)

Body corp approx $2,700 per annum
Rates approx $1,200 per annum
If managed by a PM, another $1,000 per annum.

Straight away, without factoring in for an incidentals or mishaps, youre paying $5,000 per year in outgoings, or just under 40% of your gross rent. A hot water system goes, or you have fours weeks vacancy, or a tenant does a runner, you can be out 50% of your rent in an instant. This would be ringing alarm bells for me.

These are the types of properties I always loved to rent when I lived in Brisbane (actually lived in the same street as one of those you listed). They are great to live in because you get to live in a great suburb 1.5km from the CBD, most times you get a pool, spa, gym, BBQ facilities, storage and multiple lifts, and the landlord basically picks up the tab. Youre also only paying fractionally more than you would to rent a similar unit further from the city with none of the amenities.

These type of deals come up every day in Brisbane (look at some of the one bedders and studios in Gotha Place that are selling for the same price they were 5 years ago). My personal opinion would be to steer clear of them.

Best of luck,

Jamie.

 

[cmpalmer]

HI Jamie!

I value your opinions. Thank you very much. You brought some important points to mind.

Chris

 

[willair]

cmplamer,
imho,
i have to agree with Jamie on everything,these types of inner city Brisbane units
do carry more than the average Risk factor,the rental factor is only a small part
if you ask for the sales data for the past 5 years then you will probably find that
the capital growth is a very smaller percentage compared to New Farm,West End.
good luck
willair.......

 

[geoffw]

I used to have a unit in Teneriffe. What I was finding there was that it rented well when it was new- but as more and more units were being built around, vacancies were increasing.

The floor area on two of those units is under 50sqm (and it's not shown on one)- so this may give you problems with the bank. They might require a higher deposit, or may not lend at all- but talk to a broker about that.

 

[willair]

Geoff W,
imho,
i still think its the same now in Teneriffe,New Farm,so many new building are going up all the time,but from what i am told the smaller the size the greater the risk.
good luck
willair..

 

[cmpalmer]

Thanks guys! You gave me some better metrics to look for. I definately want a apartment in brisbane long term. Just need to tap into the attributes I am looking for.

Any suggestions with a "reality" perspective would be awesome.

Chris

 

[DD1]

look south young man!!

Anyone who has lived in Brisbane has an in built prejudice against the Logan Central/Woodridge area. This suits me just fine as an interstate investor, with several townhouses and 2 houses in the area myself I am glad that with locals at least this area isnt the "flavour of the month".

What I have found though is an area that is changing for the better, large hikes in rental rates has weeded out a lot of the previous bad tenants and stigma attached to the area. The government housing has been recieving substancial facelifts. The area now boasts an indoor recreation and pool facility, a new Aldi supermarket, several new and exciting projects scheduled including a new cinema complex(6), and no local interest whatsoever.

Buy there from $100k to $140k for a 2 bedroom unit/townhouse and get rents from $150-180/wk. 4 of mine are sitting on $165/wk with one on $155/wk and the 6th on $150/wk due to rise in April. On average over these 6 I have loans of $76k-$80k so go and do your sums. Body corps (in 2 blocks) are $687 and $870 respectively and rates average $1300/yr.

So although you get nice glitzy looking places with high rents closer to town, being only 23klms or 25 mins to the CBD with cheaper rents and minimal maintainance and much lower entry level purchase pricing, and then add back all of the infrastructure and cultural changes(higher rents+nicer tenants than previously), all add up to this area, as well as down to Beenleigh, Edens Landing, Bethania etc, all being worth a bit more close scrutiny.

DD1