Hi everyone
I came across a real estate agent who recommended I should be looking for a standalone house in Gladstone coastal city in Gladstone Region, Queensland instead of Perth as investment since it is more affordable and not overly heated atm t so I can ride the capital growth while house are still within $350K to $400K price and in 6 to 8 moths time prices go up by $40k to 50K.
Does anyone have thoughts on Gladstone and the agent’s recommendation ? or if there are other areas that i should consider?
I want to buy IP max by Jan 2024 ( for my preapproval) in an area where I can ride the capital growth trend so i can leverage from the equity and be able to buy another one after 6 months of settling the first one.
I can’t deny that I am a bit nervous and i am trying to make my absolute best in buying a quality property in the right location when i enter the market , since it my first property purchase so it is going to be the foundation and the first block in my journey toward getting out of the rat race.
Hi Eliana,
When I read this, my very first thought was “Never ask a barber ‘Do I need a haircut?’ as they have a vested interest in having you get that haircut.” That RE agent in Gladstone wants to sell you a property. In fact, RE agents are in business to sell you a property. But OK, let’s take a look at Perth and Gladstone.
I have an advantage in that I was watching as Gladstone went into a huge price jump, followed by a crash. It goes back quite a few years – there was some talk of a new huge venture in Gladstone, so some bought in on the news – but it didn’t eventuate. Developers too, overbuilt in that area as I recall – result, too much stock and not enough buyers – result, prices crashed.
Google “Gladstone median house values over time” and check out what happened. Check out the curve in the median graph, then tie up the year with news reports around those times. Then think about “What is different today?” Is there something ACTUALLY taking place up there that will make properties more valuable? e.g. Will more properties be needed than are currently available?
Oh, and do a similar Google search for Perth and see its trend. Which of the two looks like it has an upward curve right now? That is only the start of course, but having the trend on your side is a good place to start.
Benny
Hi Eliana,
There are a lot of variables to consider here, and I agree with Benny that a Real Estate Agent has a vested interest in selling you a property in an area that they are listing. So that advice will be heavily biased.
It sounds like you are looking to buy an existing property, as opposed to buying off the plan. Both options present different pros and cons, which I won’t go into great depth, except to say…for your first IP it takes courage, but like any investment there is a calculated risk and I am 100% convinced you can still get some great properties with solid capital growth in QLD, SA and WA primarily for a low buy-in. (I say low, as in based on your startup budget, I would go for a townhouse or freestanding home, rather than apartment or flat). More bedrooms are better, is also a rule I go by. On my last property, I converted a study into an extra room by building in a $2500 wardrobe and that added an extra $50k-$100k to the sale price. My wife and I like doing home renovations, so if this is not for you, you just need to budget for renovations if you are looking for better rental returns and more immediate capital growth.
The right strategy for you is based on personal factors, location, appetite for risk, financial situation and lifestyle needs, etc.
Disclaimer: I know personally the guys at One Haven. So, I recently purchased off the plan through them, a property in South Australia for $665k. (3 bedroom free-standing home with double garage and a small back-yard (1 of 4 properties in the development). Couldn’t be happier with the process or the expertise and experience. Do your research if looking to get a buyers advocate to find you a property, there are some charlatans out there…but the benefit of OTP (Off the Plan) for me was that there was no upfront fees, as the Developer pays the Buyers Advocate for selling their stock. Which is how they make their money. Plus, you get the 7 year builders warranty on the new build (assuming the builder and developer are reputable).
Check the builder, credibility and liquidity, again, an easy Google search will tell you if there are court cases pending for a dodgy builder, its public record. Builders have been going bust in droves over the last 24 months, so their cash flow is the first thing to check.
In addition, make sure you get a good broker to get you the max borrowing capacity and even go so far as getting a pre-approval, so you know you can shop with a level of confidence.
If you are in Perth, I am sure you will be able to get some good free market data on suburbs in your immediate area via Google search, or go through an expert as they have all the RP Data, Corelogic Data and experience to look for other macro-economic and micro-economic factors in the areas you may not have considered. Again, education is key and you are starting in the right place. The first question is budget and if you don’t care which state or suburb you buy in, then leave it to the experts. Happy to make a connection for you if you need a broker or property advice to weigh up your options.
All the best and good on you for taking the first step and doing your research. There are some great tips on these forums.
Cheers, [email protected]
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