I thought I would open up the room for all feedback on where you see real value in today’s marketplace. It is evident and blatantly obvious that my online surveys carried out, show most see the most value in purchasing property within the next 12 months.
What is it that you look for?
What strategy do you use?
How do you identify good prospects or potential areas?A general observation I have made is that rental yields or gross returns on certain properties have increases significantly. For example, fully furnished apartments in Brisbane CBD and filtering through to other inner city suburbs are in massive demand for rentals. The influx of corporate giants such as BHP Billiton have trumped the rental marketplace and created fierce competition for their rivals. I have also noticed the impacts of this high demand filtering through into short stay accommodations where corporate clients are signing 120 nights stays (4 month leases) on an apartment that can fulfil their short term needs… on a night by night basis… Huge revenue.
Although such premium rents are more volatile but sustainable for the mean time, such figures have to be considered or worth taking a closer look… Right?
In South Brisbane it is evident of an apartment netting $680 per week where it would usually earn $520 per week as a long term rental.
Look forward to all opinions and methods in regards to your investing model.
Hi Matthew
I agree with you there is value all over the place IMHO.
I have just gone to Contract on a 4 bedroom luxury home at Hope Island backing onto the Gold Course.
Originally sold for $1.45M and we have had our cash offer of $685K accepted.
Estimate rental is over $1100 / week so not a bad yield as well as the potential Capital Growth.
The Gold Coast is a basket case and there are deals like this all over the place like fruit from a tree waiting to be picked.
I feel a wee bit sorry for clients and valuers who are trying to prize out equity and are having these such sales play havoc with their finance applications.
Anyway agree with you about CBD and surrounding suburbs. Glad some of my IP's are that close in.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I believe the higher end of the market would be a great sale but the properties on the lower end is tough as everyone is out there to use the stamp duty concession before the end of the year. There has been many properties in the hills Shire (NSW) which ahs been sold for above market price for properties 380 to 500k mark. This is what I have been experiencing as a buyer!!!
Hi Matthew
Very exciting times alright!!
Personally I look for properties that I can add value to, however, they must also stack up as a standard rental property – by "stack up" I mean that they must have strong rental returns and/or high growth potential just from their location. I am also a very big fan of short term rentals!
Put all these crtieria together and you get my latest purchase (4 months ago): 2 x 2 BR, Fully renovated duplex in West End, Townsville. 5 mins from CBD and beach. Paid $540K for the duplex.
Renting them out fully furnished, short term for $500 p/w each!
Acheiving around 90% occupancy.And here's the kicker – it's on a 1000 sqm block, so I'm currently going thorugh DA to build another two townhouses on the back!!
Opportunities everywhere around here if your looking for them!
Cheers
Dale^ That is pretty cool, Dale. Way to go!
Hi Dale,
Great concept and thanks for sharing your new success. Can I askBy short term are you doing 3 month leases, weekly etc.?
What does your property manager charge you for management and lease fees?I look forward to your reply
Hi Mat,
Short term = week to week, however i've found that most people stay between 6 weeks and 6 months!
The target market varies from contract workers, to families in between property settlements, to people new to town and not willing to committ to a long term lease yet – although the rental market is so tight here that some people move in thinking they'll only be there for a couple of weeks and are unable to secure something more permenant for several months.
I include all utilities in the weekly rent – which does leave me a little at risk if tenants use an abnormal amount of power, however i've found most people are pretty reasonable.
I manage these myself which includes doing the yard maintenance. You can contract out all of these services however due to the potentially high turnover in tenants one property management company i work with on occasion charges an enormous management fee (18%), however that does includes cleaning and laundry and they have a large list of professional clients looking for short term accom including mining and government sectors etc. so it is stress free cause they look after the lot and the tenant always pay!
However,like I said I prefer to deal with it myself and keep the management fee.
I've only had them ten months now, so like anything you get better and better with experience.
Have fun!
Dale
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