Good day, my name’s Ben Everingham, and in today’s video, I’m going to share some of the properties and the types of properties that I really like in the Brisbane market right now.
Hey there, my name’s Ben Everingham, and I’m the Director here at Pumped On Property. In the last 12 months, we’ve bought a huge amount of property for our clients in the Brisbane market. We’re a buyer’s agency that specialise in Brisbane right now. I also love the Sydney marketplace, but obviously, at the time of recording this video, 2017, it doesn’t make the most logical sense for me to buy there, so we’re effectively targeting Brisbane right now.
In today’s video, I wanted to share some of the property types and styles of property that I really like in Brisbane right now, where I think smart and savvy investors can get above average returns if they know what they’re looking for, and they know what to do.
In today’s video, I’m going to talk about six of the different types of properties I really like right now. Depending on where you’re at as an investor, there’s active investors, like myself, and there’s more passive investors that just want to buy and hold long-term. I completely get that at different stages of our life, we’ve all got different things that we’re chasing. In the past, I was a more passive investor, but now that I get to spend my time full-time on property investing, I find I like to do some more stuff that’s a little more active, like your renovations, your bedroom and bathroom conversions, your splitter blocks, your townhouses, and that sort of fun stuff. But that’s a luxury that I have because I get to do this stuff full-time.
In today’s video, I’m going to talk about the six parts of Brisbane, or opportunities, or types of properties that I think you could really benefit from knowing more about, and should seriously consider.
The number one thing I think where I see an opportunity in Brisbane right now is close to the CBD. I just bought Residex’s and RP Data’s latest report on the Brisbane market, which I think had the top 90 odd suburbs in Brisbane. What I noticed that a lot of the suburbs were within two to seven kilometres of the CBD, and what I noticed from reviewing each of those suburbs in detail was that there’s some actually little pockets of extremely affordable housing close to the CBD. I’m talking about being four, six, seven kilometres from the CBD for in some instances $600,000, in some instances a little bit more than that. But when you compare that to being three to five kilometres from Sydney or Melbourne CBDs for nice house 600 square metre block, that is just insanely affordable right now.
I don’t have a crystal ball, and don’t know if Sydney and Melbourne are completely overvalued, but if they’re not, it looks like an interesting buying opportunity. I don’t pretend to forecast the Australian market, but Residex and RP Data have a business that does just that, and some of these suburbs are predicted to grow in the next five to eight years by between four and eight percent per annum. If you’re doing this yourself, I highly recommend starting by buying that report, having a good look at it, and really narrowing down your search to some specific suburbs. So, close to the CBD is the first thing where I see an opportunity right now.
The second part of Brisbane where I see a great opportunity that’s also very affordable in comparison to Sydney, Melbourne, WA, Darwin, Canberra is the beach side suburbs of Brisbane. That’s the northern beaches, the eastern beaches, straight from the city, and then some of the south-eastern beaches as well. You can get properties walking distance to the water for sub-$450,000 now in these areas, and I think it represents extremely interesting long-term buying. You think about the shitty areas of Sydney, like what used to be Dee Why, what used to be Cronulla beaches, what used to be your Maroubras, and those places are so fricking expensive now. St. Kilda was a ghetto back in the day, and now it’s one of the most premium pockets of Melbourne. So, you’ve got to remember that Brisbane’s 15 years behind these markets, and these beach side suburbs, just because they’re not fantastic now, have great potential over the medium to longer term.
The third option that I like in Brisbane at the moment is if you’re a more active investor, there’s plenty of un-renovated, ugly properties that most people don’t see appealing. A lot of the people buying in Brisbane right now are buying their own home, they’re first-time buyers, they’re second-time buyers, so they’re selling from a bit further outside the city and moving to where they want to be. And you’ve got a lot of people with families moving into those areas. Those people don’t necessarily want to take on a renovation or might not have the money to take on a renovation, so sometimes this un-renovated stock is sitting on the market for a bit longer and selling significantly cheaper than it would cost you to buy the property, do a bit of a renovation, then get it revalued. So, I think if you’re an active investor, there’s a great opportunity there.
The fourth thing, from what I’ve learnt from looking at the data religiously recently, is that quality properties with owner-occupier appeal, in quality suburbs, in quality streets generally perform better than average properties without much appeal that require renovation over the longer term. Unless you’re talking about an extremely quality property that’s just been let go. These quality products that I’m talking about are in your more premium suburbs, either right on the beaches or close to the city. I think there’s great long-term potential there. There’s plenty of examples right now of people getting divorced in Brisbane, unfortunately, people passing away in Brisbane. Or people getting themselves into financial hardship, which happens in a good and a bad marketplace, where they’ve bought a place, they’ve completely overdone the renovation, and then now they’re forced to sell.
We buy literally 20 or 30 of those properties a year for our clients, where they’re significantly cheaper than they would be to go buy the product and do it yourself. So, someone’s losing money, and someone’s making money to buy that type of property. That’s unfortunate, because in an ideal world, all of us would do well all the time, but it does represent a buying opportunity for that more astute buyer that can recognise those more distressed-type properties that represent great value and that are quality. Bigger blocks, bigger homes, nice indoor-outdoor living, big living spaces, good-sized bedrooms, quality, premium streets.
The fifth thing that I wanted to talk about is land. I’m not talking about shitty grain field sites in the middle of nowhere, in the outskirts of your Sydney, your Melbourne, your Brisbane. I’m talking about quality suburbs close to the CBD, where maybe two, maybe three pieces of land sell every 12 months, generally from someone subdividing. What I’ve noticed at the moment is that in some of these suburbs, particularly close to the city, the price of the acquiring land plus the price of the build is significantly below what the property will revalue at. There are countless examples of comparable sales that are significantly higher than the entry or the purchase price.
You’ve got to be very careful doing this, and I would recommend that if you don’t have access to RP Data and every single sale in the suburb’s history in the last two years, then tread with caution. Because to do this type of thing, you’ve really got to be able to buy the land at the right price, you’ve got to know someone in the building game, or you’ve got to know someone that knows people in the building game that can get you the right product at the right price or below what market value is, and then you’ve got to be able to demonstrate comparable sales that are worth significantly more for the exact same product on completion.
Developing and building is a different type of game, and not everybody wants to do it, which is why I think there’s an opportunity in Brisbane right now for it. There’s a big opportunity in the Australian market right now for those of you that can afford a little bit more, because servicing has been cut back due to these recent changes. But those of you that have good money, that have good equity, that are on good incomes can walk into some of those more expensive suburbs right now and there’s less demand than there was maybe six months ago. Maybe not in Brisbane, but definitely in other areas of Australia, where places are sitting on the market a little bit longer, and you can dictate some of the terms. So, land is very interesting at the moment if you can buy the right piece at the right price. Again, not grain field stuff, just individual infield sites in great suburbs.
The sixth thing that I wanted to talk to you about is something that has become more interesting to myself and a number of clients, and that is townhouse sites. They’re very, very, very difficult to find, but the right ones have some good margin in them at the moment if you know how to pull that type of project together. We’re talking about six-packs of townhouses, which are fricking hard to finance. If you don’t have 40% deposit, and you don’t have a very high-paying job, and you don’t have good buffers in the bank, the banks don’t even want to look at you for this type of product at the moment, especially if you don’t have experience in it. But if you do have a little bit of cash behind you, there’s sites for six-packs at the moment that I’ve picked up for clients that have between 15% and 30% gross returns on them, which is in line with the historical stuff that people are supposed to target when they’re doing developments. Not these crappy 10% yield on a splitter block, but decent chance of returns.
But that’s a big game that you’re looking at, high $1,000,000’s to early $2,000,000’s to complete that type of project. So, it’s not everyone’s cup of tea. But that’s what’s cool about it, because not everyone can afford it or has the skill set to deliver on it. Those sites are being picked off at good prices at the moment and might be worth considering if you’re at that stage of your portfolio, but you’ve got to look at the risk versus the benefit. Sometimes I think about these six-packs and stuff like that and go, “Well, making two or three hundred thousand dollars in 12 months from doing it looks good on paper, but had you have just bought a high quality property in Sydney two years ago, you probably would’ve made four hundred grand now anyway with a lot less risk and a lot less stress.”
So, all of these things are just ideas. It’s really about timing the market, buying quality product that’s going to hopefully outperform market averages over time, and really being specific with your research. So, there’s some of the properties I like in Brissy right now.
For anyone that’s looking to learn more about the Brisbane market or is seriously considering buying up here and needs a hand, I run a buyer’s agency that help 10 clients per month. We’ve bought a lot of property in Brisbane in the last three years. I like this market. I’m personally investing in it at the moment myself. If you’d like a one-on-one strategy session with me directly, or my brother Simon, just jump over to www.pumpedonproperty.com. You can click the Strategy Session button and have a look and learn a bit more yourself.
I really appreciate your time and your attention today. I know there’s probably heaps going on in your world. Love the opportunity to hear from you if it’s something that you’re considering. Thanks a lot.