Varsity Lakes

C

cmpalmer

Hello!

Was wondering if anyone had some opinions on buying an IP, town house, in Varsity Lakes.

Our primary purpose is a tax shelter and secondary is long term capital gains.

My wife and I are quite comfortable with the price we are paying for it base on comparable sales ect. Ultimately the bank has to agree so the price can only go down.

I know the area experienced alot of growth over the years.

However the property has alot of good attributes :
1) Center of varsity lakes
2) Walking to shops
3) Close to Bond
4) Walking to lakes
5) Short drive to beach
6) Access to school, varsity college
7) Isn't on one of those tiny street communities

House was listed at 340k we countered at 315k, looks like we may "ink" at 320k.

Its three bedrooms 2.5 baths lock up garage ect. Its currently rented at 320 per week.

Any opinions on the decision? Safe, smart or stupid?

Best regards,
Chris
 
Thanks for the reply.

I read that thread and felt the content a bit stale because of the dates. Most houses in the area are 500k+.

I also looked at all "new" inventory and prices all start at 360+ for 3 bedrooms 2 baths but don't have the appeal of the unit I made an offer on.

I haven't bought a townhouse before and believe Land is king however, "i think the variables are right on this one", perhaps others have any ideas or objective opinions on them. If we could return a conservative 4.5% per year that would be great.

Regards,
Chris
 
I, by coincidence had a look around there yesterday also Mudgeeraba, and all around Robina.
To be honest I wouldn`t count on any gains for some years, prices have gone down, there is a glut of homes on the market, many overpriced, it is surely a buyers market and probably will only get better for the buyer, so i`m not sure right now is the time to buy.
While I loved the place, I found that homes seemed to be sqeezed in together on tiny blocks....although they are advertised as decent size blocks, so I don`t know what gives the closed in/townhouse feel to the area....................... as I live on acreage this is out of the question.
The place has incredibly good design.
CMPalmer the price range you are looking at WOULD suggest you most definately would be buying in these townhouse style of area, as you are even way lower than the prices I was looking at, what size block is this house on?, and may I ask what sqm is the house itself?.

For instance have a look at this little beauty!.
http://www.realestate.com.au/cgi-bi...0&p=30&t=res&ty=&snf=rbs&ag=&cu=&fmt=&header=

One thing I did notice is that there doesn`t seem to be a nature strip at the front which allows homes to be closer to the curb, also note the power lines in the background these are all over the place in robina-bit of a worry!.
This block is advertised as 2 car lockup, tell me how do you fit two cars in this lockup?, must be small cars also how can this block be 570 sqm?, given it would roughly be ten metres across the front meant it must be in excess of 50 mtr long I would seriously question this and actually measure it myself by stepping it out, house is also supposedly 210 sqm, pretty big home, I`d check that as well, highly unlikely.
 
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MarkPatric,

If you read the thread I describe it in a bit more detail. The unit size is 238m^2.

It has decent garden space for the tennants as well.

The development it resides in has wider streets than the norm in the area. You don't feel claustrophobic like some I looked at. The numbers worked based on comparatives that are new and also used for sale.

We don't want to make quick money...5 years minimum hold.

Chris
 
Wow that is a big unit it would cost roughly $300,000 to biuld it!, still I would say the warnings go double for units an townhomes, it would be interesting to know vacancy rates in the area.
 
Markpatric,

The townhouse rents for 320pw and currently has a tennant in it. I don't know the vacancy rate that would be a good thing to know. However the complex the unit is in has a waiting list of tennants.

I love the action of these forums. Its great to get opinions.

I still see the variables as positive for this particular spot and long term growth. Based on comparable sales we are paying a fair price. However I do here an appreciate what you are saying.

Chris
 
cmplamer,
imho.
whats wrong with Currumbin,surely for that sort of money
you would buy close to the beach rather than out that way
in Varsity Lakes, if you have a five year plan what happens
if the lakes goes backwards for 5 years,no tenants,damage,
just dont go into this blind,i would want to know vacancy
before you even start.
willair..
 
Hi Willair!

Good questions indeed.

If the Lakes went backwards for 5 years I would hold it longer.

I am getting an actual number soon regarding vacancy rate and will be a good number to consider. I know the property manager currently has a waiting list for the properties. What that means who knows :) However I am expecting the number to be quite low. http://www.seqrents.com.au/ currently only has two.

As far as currumbin goes, we live in currumbin currently and are looking as well for houses as IPs. Our market for resale is important long term the more people to sell to the better. Currumbin is quite expensive which isn't a real problem. I like Varisty lakes for some diversification into other areas and other property types.

Again assuming vacancy rates are low the variables still show positive results currently.

Comments help me to keep my eyes open further! So thanks and hopefully people keep them coming.

Chris
 
Personally, I sold out of Mudgeeraba lat last year - as I do not expect any gains there for the next 5 years (and to pay off some bad debt). The area doubled in price over a 2.5 yr period.
I still have my townhouse in Robina with student accomodation...if it wasn't for the good yield I would take my gains now and leave (around 5k per year positive cashflow after tax, bought it almost 3 years ago) - but it serves its purpose. I am hoping the new NRL team in 2007 generates a bit more interest in the Robina area....who knows?
 
As a whole I don`t think there will be great gains anywhere for some time maybe another ten years or more given the magnitude of this boom, but there could be areas that go down by a big margin imo.
I don`t think Robina and surrounding areas will be one of them as its unique.
The lakes, the shops, the golf courses, the great style of buildings, I think the place has a great feel to it and will only get better with age.
There is a concensus that you should not invest with emotion but I disagree to a point, I like to buy properties in areas I am excited about and where I would live, and in the near future I hope to buy something the in the area.
The only concern I have is the powerlines crisscrossing the area, and also the massive power plant near Varsity, anyone have details on what this is exactly?.
 
G'day MP,

MarkPatric said:
As a whole I don`t think there will be great gains anywhere for some time maybe another ten years or more given the magnitude of this boom
Click to expand...
I reckon the magnitude of this boom came from the previous 10 - 12 years with no or little growth. As such, I'm not convinced that it'll take another 10 years for the good times to roll around again.

As Qld continues to exceed other States with immigrant numbers, I'm comfortable with the expectation that the next boom is only a few years away. But then, that's me, with devil's advocate hat on :D (and I do reckon Bne and surrounds has a lot to offer, so why not plug them...)

Regards,
 
Could be but also it could be worth keeping in mind that some areas may not go up again in 50 yrs...... in America it can do just that, try Buffalo etc, where they have houses for $7000.
What happens could be being replicated here right now.
Lower/no wage earners and criminals could render an area worthless pretty quickly and Australia is showing signs of becoming a very distinct rich and poor and nothing in between type society.
The Gold Coast probably is the best example you would find.
 
G'day MP,

Could be but also it could be worth keeping in mind that some areas may not go up again in 50 yrs...... in America it can do just that, try Buffalo etc, where they have houses for $7000.
Click to expand...
Boy, this is sensational stuff !!! Could it be right?

From what I recall of Buffalo, it was a non-event. I went to check out the falls (circa 1966) and was astounded to find that Buffalo was made up of about 20 people and their dogs.... Maybe it hasn't changed much since then.
(might be a small amount of Litotes there - maybe it was 50 people - certainly it was NOT a big place....)
The Gold Coast probably is the best example you would find.
Click to expand...
Well, hey, I remember the late 80's, early 90's when apartments started selling for $100k, then $150k, then $220k, then $290k, then $400k, etc. - then settled back to a "normal value" of around $180k.

Yes, there was a lot of the "bigger fool" theory operative - but wait - the final outcome was that units DID gain in value, despite the volatility. And what would you have to pay today to get the meanest unit on the Gold Coast? (I dunno, as I don't chase them, but I'd be tempted to bet they would be starting at $300k minimum... How close am I ?)

In short, MP, none of the above seems to equate to the "Buffalo" situation. And 50 years is a DAMN long time !!!!

And, re Buffalo, what were properties worth in 1955? Perhaps they were worth only $500 then? Hmmm! I'm not sure - how sure are YOU??? ;)

Regards,
 
I really like these forums every has such good input.

I thought I would add a couple of thoughts as well.

Booms are just gravy for the astute investor. You don't need them to make money in property.

Buffalo is a pretty funny example to use when the rest of America is cranking. Its quite simple economics in Buffalo. It sucks living there. :)

I am originally from San Diego, California. My first property went from $230,000.00 USD to $640,000.00USD when I sold it. I held the property for 7 years. I forcasted 4.5% capital growth, hopefully, and it achieved more...Gravy.

San Diego has an environment very similiar to the Gold Coast. There is only so much of the Orange peel left before you get to the end. This also helps drive the prices up. Greed helps as well unfortunately.

My point is...you don't need booms to do well over time. The longer the better. No reason to not put some gravy on when the opportunity shows itself.
 
Les and cmpalmer, just making a point, Buffalo was an extreme example, yes I agree it won`t happen to that extent, I do understand there are no go zones all over the country where real estate has been rendered worthless in the manner I suggested.
Currently there are many purchasers/investors in over their heads at this time, it seems down the track a year or two is when problems will arise and different scenarios could pan out.
Some are predicting unheard of crisis with regard to property, I don`t go along with that but I do think this time it`s different!.
What will happen, we will see!, but I do get the feeling it will be a different ball game. :cool:
 
G'day MP,
Les and cmpalmer, just making a point, Buffalo was an extreme example, yes I agree it won`t happen to that extent,
Click to expand...
Ahh! A wee bit of hyperbole, eh? Fair enough, as I was using the opposite (litotes) in my response - so I guess we are even...

Currently there are many purchasers/investors in over their heads at this time, it seems down the track a year or two is when problems will arise and different scenarios could pan out
Click to expand...
Hmmm! Yeah, I guess we've all heard/seen those buying OTP units, and properties in outback Oz just to get CF+..... so I can understand where your comment is coming from (unless you mean MORE than these....)

I don`t go along with that but I do think this time it`s different!.
What will happen, we will see!, but I do get the feeling it will be a different ball game
Click to expand...
Interesting !! I'm intrigued to know just how "different" you think this cycle might be.... Are you talking an Asian style bust? Or immigrants falling away? Or Govt. imposing different rules that adversely affect PI? Or .....

Regards,
 
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