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 #49 – 13th June, 2016

Address: 7 Sturt Street, Morayfield, Qld 4506

Area: Moreton Bay Region

Property Type: 4 Bedroom, 2 Bathroom, 1 Car House

Listing: http://www.domain.com.au/7-sturt-street-morayfield-qld-4506-2012786460

Estimated Market Value: $355,000 (sign up below to get the full valuation report)

Listed Price: $329,000

Rental Return: $350 – $370 per week – according to agent (5.5% yield)

Affordability: Negatively geared by $14/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 – “With a new university and a new town plan in prospect (including the new suburb of Caboolture West) the Caboolture-Morayfield   area   is   destined   to   continue absorbing urban growth. This region has been identified by the State Government as a Principal Regional Activity Centre for major growth in the Brisbane area. The proposed Caboolture West Master Plan covers 6,500ha west of Caboolture and Morayfield. Vacancy rates throughout this precinct are low. Rental yields are generally in the 5.2% to 6.1% range. This presents an attractive package for investors: affordable prices, low vacancies and high rental yields.

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 (Morayfield) has a DSR Score of 60 – 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 ($25,100)

This property has been listed at $355,000. The estimated market value of the property is $329,000 (sign up below to get the full valuation report) which potentially puts you $25,100 in front from day 1.

Affordability (-$14/wk)

With a rental yield of around 5.5% this property provides a good return. Our cash-flow analysis estimates that this will be a negatively geared property, costing $14/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 Moreton Bay Region as a growth area.
  • Links to the resources we’ve used for our research.