There is no doubt that Brisbane is firmly on the radar of many interstate and overseas property investors, as it has proven itself to be a solid and consistent performer in the property investment arena. In fact, a recent survey found that 43 per cent of investors favoured Brisbane as their preferred location – ahead of Melbourne on 32 per cent and Sydney on 7.8 per cent.
However, due to Brisbane’s sprawling nature, the search for the right investment location could take you a considerable amount of time. Choosing where and what to buy as an investment property in Brisbane is a daunting task and one that takes time, local knowledge and research to make sure you get it right.
When investing in the Brisbane property market our Buyer’s Agents always take the time to sit down with our clients and really find out what is important to them when they are looking to make this investment. One particular property may be ideal for one investor; however, the next investor may need or want a property that provides a totally different set of outcomes. That’s because every individual may be adhering to a different investment strategy depending on their own financial circumstances and long-term goals.
Some investors maybe focussed on capital growth (the increase in the value of your property) and have a long-term strategy; whereby if the property is unoccupied for a short period of time, or there is a small shortfall in the rent in relation to the mortgage repayment, this is not going to be a financial strain. The property can be held with confidence, knowing that the value of the property will increase over time.
Alternatively, the investor looking to focus on the yield of a property (yield is the return the property will give them) will have a different set of parameters. To be specific, there are two different types of yield – Gross yield and Net Yield. Gross Yield is everything before expenses. It is calculated as a percentage based on the property’s market value divided by the income generated by the property (rent). Whereas Net yield is everything after expenses. It considers all of the fees and expenses associated with owning a property. It is a far more accurate calculation, however more difficult to work out, as the expenses are variable.
Before considering which style of housing, is right for you to invest in, it is always wise to consider the supply and demand of the housing in the areas you have identified. By identifying what is currently in demand and by ascertaining the future developments and approvals for that area – this can often provide you with the necessary information to make a smart property investment choice.
As many investors know, over the past 5 years Brisbane has certainly seen a boom in new unit complexes being approved and developed, and sadly in some areas of Brisbane, there is now an oversupply of units. This can often result in apartments remaining unsold and unoccupied for extended periods of time. This does not currently bode well for those investors who have placed their money in these new developments; as some of these properties are providing little yield (when they are unoccupied for longer periods of time) – we have even been noticing that some of these properties are even receding in their market value.
Both houses and townhouses have been great options for our investors in the past. Houses are always a stand out investment as the value is always held in the land, as land always appreciates over time. Houses are ideal for families and those that want more space and privacy. However, with this investment comes a lot more responsibility as a landlord, as you pay 100% of the insurance on the house and land and 100% of the maintenance and upkeep to the property. The responsibility rests solely with you.
Having an investment property such as a townhouse or unit in a strata scheme allows you to have a body corporate that oversees and manages the building insurance, external maintenance and upkeep on the dwelling. This however involves a body corporate fee that each stake holder pays. This can give investors peace of mind ensuring that the property is looked after and maintained suitably. However, there is a catch too, as many complexes, especially large complexes, may have swimming pools, gymnasiums and lifts etc. which increase those costs considerably. Another consideration is that townhouses and apartments can often be a more affordable option for the investor, thus allowing them to build up an investment portfolio sooner.
Our Buyer’s Agents at Location One provide you with the expertise, local knowledge and hard work to make sure your investment performs over the short and long term. Our Location One Buyer’s Agents know the Brisbane property market, they study the market movements, have extensive local knowledge, and will understand your personal investment needs. We can not only save you time, hours of searching, and headaches, but we can save you a considerable amount of money making sure that you never over pay! Call us today on 07 3262 5311, for an obligation free chat about how we can help you.