Durack Investment Property purchased for a client seeking a property close to the Brisbane CBD with a strong rental return and potential capital growth. The property I found for the client ticked all the boxes when it comes to an investment property.
This Durack Investment Property is a 4 bedroom 2 bathroom brick and tile house on 450 m2 of land within 15 kilometres of the Brisbane CBD. The owners were seeking offers over $499,000 but I was able to successfully negotiate a purchase price of $480,000.
Update
This property was purchased on the 14th of May 2021 for $480,000. It has been rented out since then for $490 per week giving it a return of 5.3%. The property across the road, 39 Treeline shoes land size is 50 m2 smaller and the floor plan is far inferior to this property has multiple offers over $650,000.
The current tenants have kept the property in immaculate condition and have made it their home. It is well taken care of the the current tenants would like to renew their lease and stay on as long as they can.
Important Brisbane Investment Property Features
Important and primary features of a Brisbane investment property are firstly distance to the Brisbane CBD and in this case, the property is located within 15 kilometres of Brisbane with very easy access via Blunder Rd and then turning right on to Ipswich Road and you’re no more than a 20-minute drive away from the CBD.
The next important feature of a Brisbane Investment property is the land size. Right now there is a shortage of vacant land in the whole Brisbane region with new homes now being built on land sizes less than 300 m2. If good-sized blocks of land are hard to source right now, cast your mind into the future by 5 years and you will realise that properties on larger blocks at this distance from the CBD are going to be in high demand which is then reflected in the price. Higher demand equals higher property values so ensuring we have a property on a good-sized block of land reduces any risk of a drop in the value of the property and increases the likely hood of higher potential capital growth.
The size of the home is the next most important consideration. More bedrooms will always place the property into a higher price bracket but it’s not just the number of the bedrooms, it’s also about making sure the bedrooms are of a good size, preferably with walk-in robes. Another feature where size does matter is the carport, whilst it may be deemed a dual carport, it’s important that it can comfortably accommodate 2 large-sized vehicles.
The layout of the house is another major feature of a home and in this case, we have a very good layout with the master bedroom located separately from the other bedrooms.
Return on Investment
The return on the property is 5.03% and is cash-flow positive. There is very strong potential for capital growth with this property due to the proximity to Brisbane.
In actual dollars and cents, this property would cost $279 per week to service if you borrowed 100% of the purchase price at 3% interest only. The rental return is $460 per week so the property is cash flow positive by $183 per week.
In relation to capital growth or the future value of this property. Conservatively this property should be valued at over $800,000 in 6 years times.
Purchase Price Negotiations
In the current Brisbane property market, it is very hard to secure a property below the asking price, in fact, the opposite is happening, with so many buyers turning up to open homes we are seeing property values dramatically increase. I do not like to attend open homes with the general public, preferring to organise a private inspection with the agent before anyone else has seen the property. This means if I can present a good offer then it is not subject to multiple offers and I stand a better chance of securing the property at a good price. I am also on the lookout for issues that would affect the appeal of the property to the general public.
In the case of this property, the tenant had been allowed to have dogs inside the home and to be honest it stank. Now the average person inspecting this property is going to be put off by the smell of dog immediately and walk away from the property. The agent is also fully aware of this factor and will not want to open the home to the public in its current state.
Here is where the intellect and negating skills of a good Brisbane Buyers Agent like me can save my buyer a great deal of money when investing in a Brisbane Investment Property. I know from experience that with a good clean the odour will be gone and the property will look a million dollars. But that’s a lot of work for the agent and owner to go through. It’s market demand that will lead to a high sale price on this home and the odour factor will reduce market demand by 80%.
The asking price was $499,00 which is a fair price for this property. Due to the smell of the property and by saving the owner and agent the expense and time of getting the property cleaned up, we have successfully negotiated a purchased price of $480,000, $19,000 under the asking price. Our cost to clean the property will be around $1000 for a simple bond clean which will remove any of the dog’s odour and the property then appeal to a wide range of tenants and when the time is right, buyers.
Once this property is cleaned up, it will be worth $520,000 every day of the week in the current marketplace.
