Brisbane’s northern corridor, in my opinion, is the optimum area where you will find the lowest risk and best capital gain for your residential investment portfolio.
The specific estates are North Lakes, Stone Ridge and North Harbour. We have been investing in North Lakes for about 15 years, but are doing less there now and doing more at North Harbour.
North Lakes has been a huge success, but as it is now almost completed, demand exceeds supply and land is about $70K more per lot than either Stone Ridge or North Harbour, but we are getting the same rental return.
Investment Examples
Investment property at North Harbour for someone in the $80-180K tax bracket
5 bedroom executive home at $522K, renting for $480 per week. The only outlay would be $5K deposit and everything else (legals, stamp duty etc.) is borrowed.
Scenarios
- Using equity and borrowing 100%, paying off Principal and Interest (P & I) over 30 years.
Based on very conservative figures, allowing for four weeks vacancy per annum (this has never happened) and allowing $700 per annum for maintenance we would have per week, rent $480, tax refund $166, investor contribution $180.
Yes, outlay $5K deposit, borrow everything else and only contribute $180 per week to pay off a half a million-dollar house!
- Using the same parameters for a 10% deposit and paying it off P&I we would have per week, rent $480, tax refund $143 and investor only $117.
- Using the same parameters for a 20% deposit and paying it off P&I we would have per week, rent $480, tax refund $124 and investor contribution $72.
Last week, on radio, I mentioned a client who borrowed 3.99% interest only locked in for 3 years. Is that rate still available?
Yes and no. We can still do 3.99% but at the moment it is only for 1 year, but we can do 4.29% locked in for 3 years or 4.79% locked in for 5 years.
Example
4.29% interest only locked in for 3 years borrowing 100%
Rent $480, tax refund $153 and investor, $9 surplus. That’s right, borrowing 100%, paying interest only at 4.29% per annum, locked in for 3 years; the clients net contribution would be ZERO. Remember, he is relying on capital gain, as he is paying nothing off his principal.
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North Harbour advantage
They have a strict ratio of investors to owner-occupiers of a maximum of 30% of the blocks released to investors and if and when any of my clients do decide to sell their property, owner-occupiers will snap them up.
If you would like to discuss investing in Brisbane’s northern corridor to build your own Residential Property Investment Portfolio then contact our office and schedule a free, no-obligation consultation.
Steve Taylor
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DISCLAIMER
Steve Taylor & Partners blog is opinion and not advice. Readers should seek their own professional advice on the subject being discussed. The figures stated in this article were accurate at the time of publication. For up to date figures, please contact our office.
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