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 #42 – 25th April, 2016
Address: 31 Maui Crescent, Oxenford QLD 4210
Area: Gold Coast Region
Property Type: 4 Bedroom, 2 Bathroom, 2 Car House
Land Size: 800sqm
Estimated Market Value: $519,000 (sign up below to get the full valuation report)
Listed Price: $449,000
Rental Return: $480 to $500 per week (5.6% yield)
Affordability: Positive cash-flow of $11/wk (calculated for an investor with an income of $50k/yr).
I would recommend this property for an investor with a either a long-term “Buy & Hold” Strategy, or a Subdivision and/or Small Development Strategy in mind. It’s a “Triple-Whammy” – which is 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.”
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 (Oxenford) has a DSR Score of 65 – 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.
But beware apartments!!
Although the Gold Coast is performing well, investors should avoid the highrise apartment market. Terry Ryder’s latest analysis says that “The Gold Coast has just finished absorbing the previous oversupply, which took five years, and another is looming, with multiple mega projects being built or planned”. Meaning further oversupply is inevitable, which is a killer for the growth of your investment.
This property has been listed at $449,000. The estimated market value of the property is $519,000 (sign up below to get the full valuation report) which potentially puts you $70,000 in front from day 1.
With a rental yield of around 5.6% this property provides a good return. Our cash-flow analysis estimates that this will be a positive cash-flow property, putting $12 per week into your pocket.
Future Development 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 Region as a growth area.
- Links to the resources we’ve used for our research.