Dear investors,
I’ve changed my search from Penrith to SE QLD. After inspecting the very limited stocks available in Penrith and speaking to local property managers. I’d realised the numbers are not as attractive as initially thought. Maybe the boat had already sailed for western Sydney.
In SE QLD, I’d narrowed my interest down to Waterford, Springfield and Redbank Plains. Not getting a lot of help from property managers or selling agents there, so I’m turning to you (property investors) again for advice.
If you already own property/properties in the area(s), why did you buy there and is it a right decision.
OR
If you were to buy now, which of the above suburbs is your pick and why?Another question.
I’ve been pre-approved for $600K, but I don’t understand what pre-approval means. My friend who handled the loan is away for 6 weeks and the person looking after her work wasn’t helpful at all.Thanks in advance investors!
Ms New
Email MeHi, sounds like you can buy to $600,000 (approved loan) plus deposit.
Good decision to look at SE Queensland, I’m on the Gold Coast and property prices are just lifting off the tarmac after a 10 year slump. The Gold Coast is always the ‘tail of the dog’ it takes off about a year or two after southern markets peak. Still some great buying here.Vando | Surf&Yoga
Email MeExperienced property developer offers passive investment... 9.64% net PA, no gearing.
Pre-approval is an indication that the bank *may* lend you money and roughly how much. But not really worth the paper it’s printed on. The loan can still be declined after a pre-approval such as the valuation not stacking up.
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
Which lender is the preapproval with?
For some lenders a preapproval can be very meaningful – those are the ones that actually assess deals. With these lenders it’s usually all approved pending the outcome of the valuation.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
With 600K to spend (not convinced i would spent the full amount on a single property) you could certainly look at spreading your risk and buying a couple.
Being a local Brisbane lad my preference would be Springfield, Redbank Plains, and the Waterford in that order although there are plenty of other better suburbs depending on what you wanting to achieve.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thank you all for taking time to share your thoughts.
Derek: Many thanks for the lead, will follow it up. Any area in particular I should focus on?
Jamie: It’s with Commbank
Richard: I am currently renting and I hope to be able to buy my PPOR in say 5-6 years. So CG is more important in my situation. As a newbie to the property market, I find myself drowning in pool of information and blockage somewhere in the processing path.
Which area (s) should I consider with my budget for CG (other than ones mentioned)?Ms New
Email MeHi Ms New,
Richard >> there are plenty of other better suburbs depending on what you wanting to achieve.
Ms New >> I am currently renting and I hope to be able to buy my PPOR in say 5-6 years. So CG is more important in my situation.Richard’s point is well made !! It all depends on what you want to achieve, and by when? The HOW comes later.
Consider this – though you may be able to buy one inner suburb property worth $600k, you might also be able to buy $1m worth of outer suburb properties (with higher yields, the banks may be more amenable to allowing you to buy 3 x $330k IPs). If the $600k property grows at 7%, your Equity jumps $42k. But the outer suburbs might still jump 5%, and 5% of $1m is $50k, and with less risk as you have three tenants instead of just one.
Have a think of your “risk factor”… (or “sleep at night” factor). Are you more comfortable having your risks spread across several lower-cost IP’s, or one higher cost (with probably lower yields) in a higher growth suburb. Then, can you afford to negative gear for a while? Or do you like a mixture of both types (negative and positive geared)?
What is your ten-year goal? And which kind of purchase takes you down the path toward it? Higher growth, higher cost, lower yield? Or the reverse?
Keep asking questions as you chart your course. And don’t be in a rush – make your first buy a cracker – the rest will follow more easily.
Benny
don’t be in a rush – make your first buy a cracker
Benny makes some good points, and I agree but I can’t help thinking this is a lot to take in for a newbie investor, as I said in a previous blog ‘make real estate your hobby or find a job in the industry’ and it will all make sense eventually. I would add a warning to Benny’s comments. The cheaper the property, the lower the socioeconomic area, the more problematic the tenants and the higher the maintenance costs. Also, more likely, is that the property next door, or worse, half the properties in the street, or the block you’ve bought in are poorly maintained or being trashed by tenants. You only need one and it’s going to effect the resale value of yours. So getting back to you question, yes where you buy is critically important. Do the research FIND A SUBURB THAT YOU LIKE and street where the residents are house proud, you’re only going to do this on the ground. There are some great tools available today on websites like OnTheHouse that show graphs of a whole range of things, growth, socioeconomics, home ownership %, etc. Learn to use these tools. Use RE agents by all means, to show you property but don’t listen to them for advice, they’re salesmen not investment advisers. Ask questions and develop a gut feel. 5-6 years out is a long time, many things will have happened and some investors will have doubled and even tripled their RE investments in that time. So consider getting in early rather than later, the market is lifting off a long flat curve after a major bust, here in SEQ at any rate.
Vando | Surf&Yoga
Email MeExperienced property developer offers passive investment... 9.64% net PA, no gearing.
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