Queensland property investment can be a lucrative way of building equity and wealth for the future, but it comes with significant responsibilities. As it will act as a source of income and (ideally) profit in the long term, you need to consider a lot more than whether it is the right home for you. We have some advice to get you started on the path to buying an investment property in Brisbane, Australia.
Different types of property investment in Brisbane
Successful Brisbane investment property is about getting the right financial returns. You need to ensure that you are choosing real estate that complements your investment strategy and portfolio. Regardless of whether your objective is ongoing positive cash-flow or long term capital gains, the house & land you buy should match your goals.
Positive Cash-flow Properties
When the rental income generated from your Brisbane investment property exceeds the operating costs (including your home loan.) The property will be running at a profit, with a good rental yield. In essence, “yield” is the income converted to a percentage of the property’s total value. As property values increase, the rental yield diminishes, making somewhat more difficult to maintain a good positive cash-flow.
Negatively geared properties
The opposite of positive cash-flow, this is a property that will be running at a loss. Usually, this is because interest on the home loan is higher than that of the rental income. However, there are tangible benefits in the form of tax deductions. This option is a popular choice for those investors aiming to cash in on capital gains. Such a property allows you to operate an investment property at a short-term loss, but losses are off-set by the tax deduction. In the long-term, this produces significant investment gains.
This type of investment is quite popular in Queensland, not least because property values have risen so rapidly, especially in metro Brisbane. Your best investment strategy may be often determined by your personal income.
QPSelect can help you get to grips with these investment concepts and will provide expert advice on how to proceed with your Queensland property investment.
What are the cons of investing in Queensland?
Like any property market, you need to look at the underlying factors for the region before making investment decisions. This includes data and metrics on;
- jobs growth
- population growth
- consumer confidence
- supply and demand in the region
If you are considering investing in one of Queensland’s mining towns, macro-economic factors such as the price of coal could have a significant bearing on property values.
On top of that, you really do need to refine your property investment strategy – capital growth or cash flow – and purchase accordingly. In general;
- metropolitan areas offer better prospects for capital growth
- regional centres and towns are often better prospects for positive cash flow
Like other regional property markets across Australia, the declining affordability of city markets has compelled investors to relocate to and/or invest across Queensland. Having areas like the Gold Coast and Sunshine Coast adjacent to Brisbane means that you can enjoy the many amenities of the state capital city, and the recreational opportunities a short drive away.
Best areas in South East Queensland to invest in property
Queensland’s Sunshine Coast and South East Queensland are currently the premier regions for property investment. Both areas are very attractive for Sydney and Melbourne real estate investors.
Sunshine Coast has great records for house value appreciation, with the suburbs of Buddina, Forest Glen, and Noosa Heads all posting gains of 10+ per cent in recent years.