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 #46 – 23rd May, 2016

Address: 87 North Road, Brighton, QLD 4017

Area: North Brisbane Region

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

Land Size: 440sqm

Listing: http://www.domain.com.au/87-north-rd-brighton-qld-4017-2012599978

Estimated Market Value: $434,000 (sign up below to get the full valuation report)

Listed Price: $385,000

Rental Return: $390 to $400 per week (5.3% 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 Buy & Hold Strategy in mind, and/or a Renovation Strategy in mind. It represents high capital growth potential AND a discount below market value to create instant equity AND renovation potential to add value and manufacture your own capital growth.

High capital growth potential

Here’s what Terry Ryder (Australia’s leading property researcher and Director of Hotspotting.com.au) has to say – The Brisbane City Council area north of the CBD was the first Brisbane precinct to recover and many suburbs have had solid price growth in the past 12 months. There are still opportunities to buy well for future growth. The northern suburbs of the Brisbane City Council LGA have led the revival of markets across the Brisbane metropolitan area. Affordable prices, low vacancies and good rental yields present an attractive package for investors.

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 (Narangba) has a DSR Score of 69 – 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 ($49k)

This property has been listed at $385,000. The estimated market value of the property is $434,000 (sign up below to get the full valuation report) which potentially puts you $49,000 in front from day 1.

Affordability (-$14/wk)

With a rental yield of around 5.3% this property provides a good return. Our cash-flow analysis estimates that this will be a slightly negatively geared property, costing just $14 per week to own..

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. Probably one of the most basic forms of value-adding is the trusty renovation. Here the operative is to take something old and improve its value by making it more liveable.

The important thing is to make sure you start the whole process with a property you have purchased below market value, i.e. at a discount (see above info on Discount). This will give you a big head start and a much better chance of increasing your valuation.

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