Every day I search the Brisbane property market for good investment properties for my clients. Every Monday I send one out for free to give you an insight into how an investor finds and assesses properties. Sign up to the club to get the full report each week.

Property of the Week #47 – 30th May, 2016

Address: 13 Armidale Crescent, Helensvale, QLD 4212

Area: Gold Coast Region

Property Type: 4 Bedroom, 2 Bathroom, 2 Car House

Land Size: 1,013sqm

Listing: http://www.domain.com.au/13-armidale-crescent-helensvale-qld-4212-2012827222

Estimated Market Value: $492,000 (sign up below to get the full valuation report)

Listed Price: $440,000

Rental Return: $480 per week – currently tenanted (5.7% yield)

Affordability: Positive cash-flow of $8/wk (calculated for an investor with an income of $50k/yr).

The Verdict

I would recommend this property for an investor with a either a long-term “Buy & Hold” Strategy, OR a Subdivision and Small Development Strategy in mind.

This property is a Triple-Whammy – a property that represents high capital growth potential AND a discount below market value to create instant equity AND future development potential to add value and manufacture your own capital growth down the track.

High capital growth potential

Here’s what Terry Ryder (Australia’s leading property researcher and Director of Hotspotting.com.au) has to say – “For a long time, Hotspotting has avoided recommending the Gold Coast because of its poor track record on capital growth and its boom-bust history.

But the Gold Coast cannot be ignored. It is the No.1 LGA in Australia for sales growth by a considerable margin, billions are being spent on infrastructure and major developments, and vacancy rates are low. There will be price growth, especially in the genuine residential suburbs.

Investors, however, should avoid the high-rise apartment markets. We recommend that investors on the Gold Coast concentrate on the genuine residential suburbs inland and in the growth corridor heading north towards Brisbane.”

For suburb analysis I turn to successful property investor and self-confessed “property data nutcase” Jeremy Shepherd. Jeremy has pioneered the use of the Demand to Supply Ratio Score (DSR). This score allows an investor to measure the supply vs demand of houses or units in a suburb.

This week’s suburb (Helensvale) has a DSR Score of 62 – This means demand only just outweighs supply in this market. This is a healthy market for investors wanting to apply some value adding strategy. Buyers are sometimes able to get away with low-ball offers. Sellers are getting the prices they ask for more often than not. Expect growth to marginally exceed the national average.

Discount ($52k)

This property has been listed at $440,000. The estimated market value of the property is $492,000 (sign up below to get the full valuation report) which potentially puts you $52,000 in front from day 1.

Affordability (+8/wk)

With a rental yield of around 5.7% this property provides a good return. Our cash-flow analysis estimates that this will be a slightly positive cash-flow property, costing nothing to own and putting $8 per week in your pocket. Remember the profit comes from the growth in value of the property, and that positive cash-flow is a bonus.

Renovation Potential

This is a good investment property “as-is” and can be rented out immediately. But it also provides potential to add value and manufacture your own growth in the future because it is situated on a large block that has the potential to be subdivided or developed (subject to Council approval of course).

Get the full details, analysis, and research

Join the Property of the Week Club to get the full report on this property. It includes:

  • The valuation report.
  • The rental appraisal.
  • Cost calculations for an investor earning $50k p.a.
  • Profile of the Gold Coast as a growth area.
  • Links to the resources we’ve used for our research.