Westerly aspect vs Traffic ???? Which?

Viewing 3 posts - 1 through 3 (of 3 total)

salg
Member
@salg
Join Date: 2005
Post Count: 7
November 6, 2005 - 10:43 am
I am new to this board, but have a question that most of you would be better equipped to answer than myself. I currently own no property but am trying to get into the market.
There are some apartments 9km from city (Brisbane) and right next to one of the 4 biggest shopping centres in south east Qld that I am considering. The problem is I have 2 choices and am not sure which would be the better alternative.
1. $350K – 2 bed, 2 bathrooms, 2nd floor, living and main bed facing WEST (other side is north, but only windows into bathrooms).
2. $370K – 2 bed (larger beds), slightly larger kitchen, study, 2 bathrooms, 1st floor (not ground), living and main bed facing EAST (other side is north) – BUT this one is going to overlook a shopping centre service road running behind apartments – only 1 lane in each direction, 5 sets of lights to minimise throroughfare usage (but does go through) and not yet built so no way to know how busy it might be.
What are your thoughts? I am leaning towards N/East unit but uncertain how renters and possible future buyers would react to traffic etc if both on market at same time….
Thanks,
salg
AmandaBS
Participant
@amandabs
Join Date: 2005
Post Count: 549
November 7, 2005 - 9:29 am
Not sure I agree with buying an inner city unit. Over time land appreciates and buildings depreciate.
How much can you rent each unit for ?
AJBS
dalefreo
Participant
@dalefreo
Join Date: 2005
Post Count: 38
November 7, 2005 - 9:51 am
Hello salg
I would do a little bit more research before jumping in the deep end to make sure this experience is a good one.
1. Check out local rents. Don’t rely on what the agent says. Check your newspaper and make some phone calls. It will take you about 1 hour to get a realistic current rental rate for units the same size as the ones you are considering. You will also get a picture of west facing vs busy road etc.
2. Check your numbers. Steve recommends a Cash on Cash Return i.e. Net Annual Cashflow/Net Cash Contributed x 100/1.
(Net Annual Cashflow is Annual Rent minus Management Fees, Interest on Loan, Principal Loan Repayments, Other Cash Expenses.)
(Net Cash Contributed is Deposit plus Purchase Costs.)
3. Is the resulting percentage more than your money would earn if you put it in the bank. Is this amount of return what you want?
Your answer to question 3 will help you choose which unit/whether to proceed ot not.
Total time – a few hours.
It could save you THOUSANDS.
Best wishes.
Dale
Dale