All Topics / Help Needed! / Confused with investment

Viewing 17 posts - 1 through 17 (of 17 total)
  • Profile photo of GeorgeGeorge
    Participant
    @george78
    Join Date: 2014
    Post Count: 8

    If I were to buy a brand new property approx 15 km out of Brisbane, in a complex of just over 100 houses with approx 45 that have been allocated to NRAS but not mine. I am a young investor who is looking for Capital Gains. There are approx 2 other building sites in the area with approx 100 2 and 3 storey buildings being built. What would you suggest. Am I in the wrong area? will having so many new properties coming up affect me? will NRAS affect me.

    Profile photo of Kinnon BellKinnon Bell
    Participant
    @kinnon
    Join Date: 2014
    Post Count: 151

    I think having so many new properties available to purchase will keep the prices of yours down, therefore CG will be limited as the market will be flooded. What’s the proximity like to amenities such as train stations, supermarkets, schools etc?

    On the upside of purchasing a new property is the depreciation benefits but on face value without knowing anything else, I think you can do better.

    Kinnon Bell | Kinetic Funding
    http://www.kineticfunding.com.au
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    Mortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.

    Profile photo of GeorgeGeorge
    Participant
    @george78
    Join Date: 2014
    Post Count: 8

    We are walking distance to all amentites, bus stop not far. appox an hour away from airport. The property is in Taigum. With NRAS being almost half of the complex will that affect me later?

    • This reply was modified 7 years, 6 months ago by Profile photo of George George.
    Profile photo of TheNewGuyTheNewGuy
    Participant
    @thenewguy
    Join Date: 2014
    Post Count: 151

    Why do you think that you will get ‘good’ capital gains on the house? Are you working on the assumption that if there are a lot of people building then demand must be high and therefore prices will go up? If that is the case, then I would say ‘no’ that’s not a good enough reason to buy a property. I can’t imagine 50% of the complex being NRAS would help.

    Why else would the area go up in value faster than the rest of Brisbane?

    Profile photo of GeorgeGeorge
    Participant
    @george78
    Join Date: 2014
    Post Count: 8

    I think Brisbane is going up. We went there for its affordability. And was told vacancy rate is low

    Profile photo of TheNewGuyTheNewGuy
    Participant
    @thenewguy
    Join Date: 2014
    Post Count: 151

    Right, so my question is, why do you think ‘this property’ will go up more than the rest of Brisbane? If you have $400k to spend in Brisbane, you’d want to spend it in the right place. Some places might go up 15%, while others might go up 5%… that’s a big difference on $400k. It’s more of a rhetorical question than anything, but it doesn’t sound like this is any better than just picking any old house.

    I haven’t lived in Brisbane for a while, but I was looking relatively recently. There is nothing wrong with Taigum (which is way closer than an hour from the airport), but there is nothing right about it either. I was looking at Fitzgibbon because it’s at least closer to the train station and eventually will be caught up in the inner city ‘vibe’, but at the same time you have Zillmere which has larger blocks and is even closer. No new infrastructure that I’m aware of, nothing out of the ordinary where you would expect an above average growth. So, you could probably pick a property anywhere within 15km of the CBD and get a similar return.

    I’m still very new to this game, but I personally wouldn’t even look at the suburb.

    Profile photo of xdrewxdrew
    Participant
    @xdrew
    Join Date: 2010
    Post Count: 479

    Your answer lies in your first sentence.

    You’ve got all excited that you’ll be investing in an area where the NRAS is taking place.

    HAVE YOU ASKED WHAT NRAS IS AND HOW IT WILL ACTUALLY AFFECT YOUR PURCHASE?

    Yes I resorted to caps. Its National Rental Affordability Scheme and that literally means that its subsidy housing to start with.

    To look forward to a capital gain and even a possibility of capital gain over inflation you are looking for areas where the demography is going to change in a positive and attractive way for the near future (5-10 years).

    If you are surrounded by people who are already one step behind by accepting subsidy housing rather than working towards the possibility of a more attractive future (doesnt mean it wont happen .. just historically its less likely).

    The other thing to note that until we hit good times, the government will be finding ways to minimise on creative subsidisation schemes promised in previous governments. Which could mean in a very short time you could be surrounded by empty buildings or lower paying tenancies with less reason to look after the properties.

    On a positive note .. the prospects for Brisbane in the near future are looking rosy .. so you may be finding yourself in a bad position .. but still on a positive framework for the next couple of years.

    A new fresh site doesnt mean appreciation. Many years ago now .. Caroline Springs was touted as the new place to be .. new style living and fresh new housing. Problem was .. it was in the wrong area of town .. close to the worst areas of Melbourne (St Albans,Sunshine & Deer Park) as its nextdoor neighbours. And thats exactly what its major clientelle is now. The bad neighbours next door.

    Due dilligence .. might sound like a continual phrasing of the same word.

    But it might just save you in the longer term.

    Profile photo of hanoixuahanoixua
    Participant
    @hanoixua
    Join Date: 2007
    Post Count: 19

    NRAS mean lot of rental, also mean low rate of owner occupy. With high rate of rental and depend how much you buy, CG may hard to get than owner occupy suburb. You also have a strong competition from the NRAS property, mean the rent may lower than it should be. Therefore, your rate of return is lower. Cash flow is important as it help you hold the properties until you have decent CG.

    Profile photo of superAndrewsuperAndrew
    Participant
    @superandrew
    Join Date: 2014
    Post Count: 188

    Am I in the wrong area?

    Depends on the suburb. I would stick closer to Brisbane city (<10km)

    will having so many new properties coming up affect me?

    In the short term yes, but not so much in the long term.

    Andrew

    superAndrew | Property Analyser and Finder Tool
    https://property-analyser.com.au

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Be wary of anything that is government funded. NRAS falls within this category. Government changes every 4 years. I don’t think you fancy shivering in your boots just after every election to see the fallout to your cashflow position.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of GeorgeGeorge
    Participant
    @george78
    Join Date: 2014
    Post Count: 8

    Thank you everyone, your comments confirmed my fears. As I beleive there is going to be an over supply of units in the Brisbane area, can anyone suggest an area to buy into as an investment that is still under the $400k mark.

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    I buy whole houses for under $400k all the time. None of this units in body corporates nonsense. Whole houses. Don’t try to make a square peg fit a round hole. There is no point saying “it’s gotta be in Brisbane” and then wondering why you can’t find anything. It needs to be done the other way around. Define a set of criteria and find the locations that match the criteria.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of GeorgeGeorge
    Participant
    @george78
    Join Date: 2014
    Post Count: 8

    I am not looking mainly in Brisbane, somebody else said go Brisbane but i think there will be an oversupply in Brisbane. that is why i was asking for other areas that people can suggest. thanks

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Be wary of anything that is government funded. NRAS falls within this category. Government changes every 4 years. I don’t think you fancy shivering in your boots just after every election to see the fallout to your cashflow position.

    Excellent point!

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of GeorgeGeorge
    Participant
    @george78
    Join Date: 2014
    Post Count: 8

    can anyone tell me about Redbank Plains and Ipswich areas for investments?

    Profile photo of loan rangerloan ranger
    Participant
    @loan-ranger
    Join Date: 2008
    Post Count: 13

    Same goes for Negative Gearing and CGT. If we defer investment decisions based on what a Government may or may not do to a particular piece of tax legislation ( which is what NRAS is- a tax credit) no one would ever invest in anything. I’d also add that whenever legislative tax changes occur, it is almost universally accepted that they are not applied retrospectively. So people who already enjoy a particular tax benefit get to continue to enjoy it.

    This Federal Government has made it clear in the June senate enquiry into Housing, that funding is in place in the forward estimates for NRAS until 2017 – which covers the entire 10 year period for all dwellings to be delivered and activated up to June 2016.

    Profile photo of Kylie WalshKylie Walsh
    Participant
    @kylieppi
    Join Date: 2014
    Post Count: 23

    If you look at the building figures and people relocating into those areas over the last 2 years, you will see there is an over supply of housing at present and more houses are still being built.

    There are a number of areas in Brisbane not to far from the city where you can get great investments within your price range. Have you sat down and worked out what your plan is? What is more important capital or cash flow? How long do you intend to hold the property? What are your long term goals? I think asking yourself these questions, working out your answers, along with due diligence is required prior to any investment decisions.

    Kylie Walsh | PPI Investment Advice
    http://ppiinvestmentadvice.com.au
    Email Me | Phone Me

    Licensed Property Financial Advisors who provide Tailored Property Advice and Solutions

Viewing 17 posts - 1 through 17 (of 17 total)

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