I have been doing more thinking about buying my first IP in the next couple of months and I have been looking into a lot of different suburbs that I'm familiar with, and one of the many questions I have is, what is the optimal number of bedrooms for an IP? I can appreciate that "optimal" is often a very situational thing, but in general (as an investor) do you prefer smaller 2BRM places closer to the CBD or larger 3BRM places slightly further about from CBD? I don't have much/any experience as an investor, though I have been a tennant for the last 18 months in two different places and in my area, and I definitely found there were a lot more 2BRM places available to rent, and 3BRM place were quite difficult to find (I'm assuming this scarcity transferred into higher returns) though I think all in all there was slightly higher demand for 2BRM. However I'm assuming as you get further from the CBD 3BRM properties that can cater for small families are prefer and in greater supply, is this the case? I'm really quite interested in what other people think about in relation to the number of bedrooms an IP has and its eventual ROI.
If it's freestanding housing you're looking at, I'd always go for minimum 3beds as you're catering to a larger rental market and both ROI and resale is likely to be more profitable in the long run. When searching, however, consider larger 2bed and sleepout properties as these can qualify as 3bedders especially to those people who require a study or nursery only rather than a separate bedroom. Which suburbs are you searching in?
At the moment I'm looking at suburbs like Darra for a 3 Bedroom house/ townhouse. It seems to one of the few suburbs that I can afford to buy into ($300,000 - $350,000) that is still close to major public transport, major shopping centres and schools. Plus I grew up near the area (Riverhills/Middle Park) so I know the area pretty well, which makes me more comfortable buying my first IP/PPOR in the area. Alternatively I was thinking of looking for a 2 bedroom apartment/townhouse in a similar price range ($300,000 - $350,000) in the suburbs surrounding the University of Queensland, like st lucia, tarigna, toowong, indooroopilly, even dutton park and fairfield considering that the new green bridge is operational. Once again I have lived in the area for a couple of years know so I know it fairly well, plus I'm still a student myself.
Hi Chris There's no reason why either area won't work, in terms of growth and ROI. There's always more than "one good area" and it's up to you to decide where you're most comfortable with. Best of luck with your search and keep us posted of your progress
Darra vs St Lucia Hi Chris C, There are a lot of ooportunities still in Brisbane and I agree wiht Jacque, it is up to you. Things you can consider: land appreciates while building depreciates over time. Darra: there is land content, it will benefit from the ripple effects of pricing from Middle Park and Sumner as well as the improvements to the Ipwich Highway and the huge population growth corridor to the West as projected in the 2026 Report. Then you have the massive developments by Delfin in Springfield Lakes to the south - the enormous corporate park and university precint adjoining. So pretty good investment. As a house, you will be targeting families - they generally are less mobile as children get settled into schools etc. so your turnover of tenancies will, should be lower over the long term. St Lucia: there is exclusivity in this area - there is only a finite amount of land and so close to the city. If this is always going to be a investment - you will have a very strong student population as your target client base and young corporates who want to be close to the city and don't mind the masses of students. There is statistically an increase in single person families in the future - so you will always have a market for this. The inner city market is more transient - young corprates will always end up buying their own home, students come and go on an annual basis. You may get higher rents per room in St Lucia but in my experience, the wear and tear on your property is greater and re-letting costs higher. Conclusion - they both generally weigh in the same - depends on what you understand better and feel more comfortable about. But choosing to buy - great move - Good luck.
Hi Chris Have you thought about houses that are close to a university: eg 34 DEMPSTER STREET WOLLONGONG WEST Cost $359k - potential rent 5 x $120/week Rgds Kevinb
