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 #50 – 20th June, 2016

Address: 25 Mackellar Drive, Boronia Heights, QLD 4124

Area: Moreton Bay Region

Property Type: 3 Bedroom, 1 Bathroom, 1 Car House

Listing: http://www.domain.com.au/25-mackellar-drive-boronia-heights-qld-4124-2012799606

Estimated Market Value: $316,000 (sign up below to get the full valuation report)

Listed Price: $299,000

Rental Return: Currently returning $345 per week (6% yield)

Affordability: Negatively geared by $24/wk (calculated for an investor with an income of $50k/yr).

The Verdict

I would recommend this property for investors with a subdivision and/or small development strategy in mind. In addition to development potential it represents high capital growth potential, and a discount below market value.

High capital growth potential

Here’s what Terry Ryder (Australia’s leading property researcher and Director of Hotspotting.com.au) has to say – “Already one of the fastest growing municipalities in Australia, Logan is about to expand further as work on the Yarrabilba Priority Development Area, 20km south of Logan Central, gets under way. The master planned community is being developed by Lendlease. Costing $4 billion and located on the Waterford Tamborine Road, Yarrabilba, the development will result in 17,000 dwellings to accommodate 45,000.

Logan City attracts investors because of the affordable prices, steady long-term growth and above- average rental returns. It attracts home-buyers because it offers affordability, good transport links and proximity to major jobs nodes.”

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 (Boronia Heights) has a DSR Score of 64 – This means sellers are in no panic and buyers are making decent offers. This is a healthy market for investors. Demand is ahead of supply but not alarmingly. Buyers are rarely able to get away with low-ball offers. Sellers are usually getting the prices they ask for. Expect growth to exceed the national average.

Discount ($17,000)

This property has been listed at $299,000. The estimated market value of the property is $316,000 (sign up below to get the full valuation report) which potentially puts you $17,000 in front from day 1.

Affordability (-$24/wk)

With a rental yield of around 6% this property provides a good return. Our cash-flow analysis estimates that this will be a negatively geared property, costing $24/wk to own, making it an affordable property to hold while the market grows.

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 Logan City Region as a growth area.
  • Links to the resources we’ve used for our research.