2012 Brisbane Real Deals - Allen Real Estate

January 4, 2013

A few samples of properties purchased by Allen Real Estate on behalf of investors during 2012. The following five deals are all ?prototype? deals in that we often buy properties that are very similar to each of these five.

These deals all contain three of the most requested features from our investor clients:

1) Proximity to the Brisbane CBD and major activity centres in the town plan is viewed as a positive.
2) Potential for capital growth is the highest priority but attention to a strong yield is also important.
3) A low maintenance set and forget high quality growth investment, not looking for a renovator or problem property.

Some more information about our ?average investor? profile

A solid brick and tile 4 bedroom home on a 600m block.
$347,000 purchase
$242,500 land value (69% land content)
$410/wk rent = 6.1% yield
11.5k from the CBD, gentrifying suburb
Walk to train station

The agent had advertised this as a 3 bedroom house only (The garage had been converted to a genuine 4th bedroom) and inspections were difficult to organize due to tenants having to be present, this kind of property can often present with potential to buy well as home buyers have been discouraged from viewing. The property was in reasonable but tired condition, this can also allow an investor to buy a better quality property at a discount as plenty of buyers can?t look past minor condition issues which can usually be postponed for a year or two and don?t cost much to improve. Nearby brick and tile properties that are newer, but built on smaller blocks, sell for around the $450k mark so the potential for capital growth is promising.

Walking distance from a train station with an easy commute into the CBD is a definite plus, we especially like following the train line as a key piece of infrastructure at Allen Real Estate. This suburb will also benefit from affordability pressures in the future as the suburbs that are close by but nearer to the CBD are priced significantly higher.

A newer 3 bedroom + study, 2 bath, 2 car, two level brick house.
$443,000 purchase
$470/wk rent = 5.5% yield
10.5k from the CBD, gentrifying suburb
Walk to train station

With the excellent depreciation and condition of this newer property the maintenance requests should be minimal going forwards. The property was under rented when purchased and the rent increased to market value after purchase.

When buying a brand new property the premium that is being paid as a result of the developers margin; usually outweighs the benefits of the extra depreciation, if you are able to buy an established property a few years old you can often combine the best of both worlds with a good combination of high depreciation and newer condition.

A first floor two bed, two bath (ensuite), double garage apartment.
$355,000 purchase
$380/wk rent = 5.6% yield
4.9k from the CBD, popular suburb for lifestyle and renting

Based in a small well maintained complex with low strata fees this apartment was elevated and breezy with an excellent floor plan, also the double tandem garage was an unusual feature which would increase it?s appeal to tenants and future buyers. Being so close to the CBD is a definite plus for many tenants as it?s an easy commute for CBD workers and also close to excellent lifestyle choices including cafes and restaurants.

Low body corporate (strata) fees and a solid well maintained complex will help contribute to a healthy cash flow position.

Excellent quality 3 bedroom, 2 bath, 2 car, townhouse in walking distance to ?everything?
$407,500 purchase
$450/wk rent = 5.7% yield
8.7k from the CBD, major activity centre in the town plan
Excellent walkability

This brick townhouse was located in a small complex of three with a large private courtyard on title and an excellent floor plan including large bedrooms and living areas and only one common wall. The property was under rented and not marketed well during the sale process including a lack of photos and difficulties gaining access to inspect, the current tenants were paying $380/wk and after purchase with no improvements the property was immediately let to new tenants at $450/wk. The street appeal of this property was basic, something that would be easily fixed with a small amount of paint, however the quality of the property is considerably higher than a photo of the front might indicate, something that you can only tell from a personal inspection.

Walking distance from a major activity centre in the town plan the prospects for capital growth are strong and combined with a healthy yield and excellent purchase price this property should outperform the Brisbane average in the future.

Three flats on one title in a blue chip suburb 4k from the CBD.
$630,000 purchase
$425,000 land value (67% land content)
$670/wk rent = 5.5% yield
4k from the CBD, blue chip suburb with homes priced in the 1 and 2 million plus range in the same pocket.

This property was located in an excellent suburb and had been council registered as 3 purpose built flats, unusual for the suburb as it?s mostly expensive stand alone housing and the barriers to entry for higher density living is significant due to the demolition control (heritage) zoning of a lot of the suburb. The condition of the flats was good with plenty of scope to add value through cosmetic improvements.

The twist with this property is that when cosmetically renovated the comparable rents in the suburb indicate a potential upside rent of $950/wk, adding $50,000 to the purchase price for a full cosmetic renovation this would work out at a gross yield of 7.2% which is an excellent yield for a residential property purchased primarily for capital growth potential.

Source: http://www.allenrealestate.com.au/?p=1596

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