Last Modified: June, 26th 2017
If you are considering purchasing residential investment property Brisbane, there are a number of things to think about, not the least of which is what sort of property to buy, and in what area. Over the last few years, the property market in Brisbane has not performed as well as Melbourne and Sydney, so if you are a savvy investor now is the right time to get started.
For the latest on Brisbane’s investment properties market update, click here.
Where Is The Right Place To Buy Investment Property Brisbane?
As with Melbourne and Sydney, property is likely to increase nicely if it has easy access to the CBD. More Australians are looking to downsize and live within easy distance of the amenities, cutting down on the daily commute. If your property is near to the CBD then it is likely to increase in value more quickly than if it were in the outer suburbs. Furthermore, because it is a popular place to live, you should have no difficulty in finding tenants.
Places like New Farm, Fortitude Valley, Spring Hill, Herston, Kelvin Grove, Newstead, Milton, and Toowong, all have easy access to the CBD. South of the river, Highgate Hill, Woolloongabba, Coorparoo, and Norman Park should be suitable.
Property investment is a long term method of creating wealth, but is not for the faint hearted. What is fairly certain is that over any given ten year period, properties will more or less double in value. Certainly, there are ups and downs, but over time property goes up in value and at around double the rate of inflation.
Investment properties Brisbane have not seen the increases in values in the same way as Melbourne, and even more importantly, Sydney, and the market is fairly flat. The savvy investor buys at the bottom of the market, and sells at the top. Prices for Brisbane investment properties are still fairly low, and the market has yet to turn, but turn it will.
If you are new to residential property investment, it can be somewhat nerve-wracking to invest when the media is full of doom and gloom, but it makes sense to buy low and sell high, rather than the other way around. As a savvy investor, your job is to do the opposite of what the crowd is doing. If the crowd is staying away, which it has been doing with regard to Brisbane property investment, the right thing to do is to get in before property starts to increase in value, not wait until it does.
How Do I Find The Right Property?
In a word – research. the most important thing with investment property is location. When you have identified a suitable area, talk to estate agents, and talk to locals. They will be able to tell you if one street is more prosperous than another. They will know whether the local bus service is good, or indifferent. They will be able to tell you if the area is quiet at night, or full of revellers getting drunk and vandalising shop fronts at midnight.
In fact, once you have identified a suitable area, it is a good idea to visit it at different times. A road might be quiet on Sunday, but become like a motorway during the week. You should also visit the local council offices and make enquiries as to whether there are any plans in hand which might affect the quality of life there when they are implemented. If you have found a likely property, they will also be able to tell you if neighbours have applied for planning permission. You don’t want to find that your view of the river suddenly disappears because a neighbour puts another floor on top of his house.
You should also research on the internet as much as possible. A great source of information is RP Data which offers potential buyers reports on property, demographics of the area, and a whole lot more.
Should I Buy An Investment Property At Auction?
You should never buy a property at an auction until you have been to a few as a mere spectator. There are a few things that you need to understand about property auctions, not the least of which is that if you are the winning bidder, the sale is final and you will be required to pay a 10% deposit immediately. You cannot bid for the property subject to a building inspection, or subject to you raising finance.
What you can do is to make an offer to the agent before the date of the auction. The offer may, or may not be accepted. Usually, the agent will tell you the figure that the property is expected to make at the auction, but he may not tell you the truth about the reserve price. In order to persuade you to attend the auction and bid, he may suggest a reserve that is lower than it actually is.
If you do intend to bid at an auction, you should most definitely set yourself an upper limit before the auction takes place, and more importantly, stick to it no matter what happens. It is all too easy to get emotionally involved and think in the heat of the moment “I’ll just go another $5,000”. That way lies disaster. In fact, some people ask a friend to bid on their behalf, so that they avoid any temptation.
If the reserve price is not reached, the property passes in. The highest bidder is then able to enter into negotiations with the agent. However, it is also possible that the vendor might decide to accept the lower price, in which case the auctioneer will probably try to get a few more bids, before making the sale final.
Should I Take Notice Of Median Prices In Brisbane?
From an investment point of view, it is better to take little or no notice of median prices. Apart from the fact that median, or average prices quoted are often inaccurate, the most important thing is sales. If the sales volume is high, then that creates demand, which in turn creates growth.
The fact is that the market is low in Brisbane investment properties right now, and according to one investor who purchased a property there 18 months ago, it is not a matter of “if” the market will take off in the city, but when. He is expecting a great return on this property by 2016/2017. He paid $280,000 for it and is looking towards $400,000 in a couple of years’ time. To find a Brisbane investment property like this, exclusively from developers “before” they hit the open market, click here.