First time investor buys in Toowoomba

​​Client Needs:

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My client was searching for his first investment property with a long term buy and hold strategy with a view to undertaking renovations and extensions over the next 10 years to actively add value.

 

With a preference for a location within an easy drive from his home town in regional SE QLD preferred (compared to North QLD or interstate where his budget would also work), Toowoomba was chosen over other smaller regional towns due to the city's higher expected capital gains growth due to it's larger population size, more varied economy and higher and more consistent demand for rentals.

 

Working with a budget of $680,000 the aim was to get a property in the best location possible for equity growth. My client preferred a ‘safe’ and historically proven location rather than a ‘hotspot’. 

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Property Choice:

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This particular property was chosen due to the appeal of the character home to owner occupier buyers. This increases its inherent value due to the demand and emotional aspect of owner occupier purchasing. In depth due diligence was performed to assess the possible future cost of maintenance required (especially to determine if there was any risk from termites, the status of the roof, electricals and plumbing, etc.) specifically considering the age of the home.

 

The location of this property was appealing being on the outskirts of a blue chip suburb, close to town centre and amenities as well as being off the main road on a quiet residential street. Houses on the street had already undergone or were going through renovations showing the quality of the area.

 

There is a new hospital precinct being built close by expected to be completed by 2027. This was also appealing - due to the expected increase in demand for housing in the area by high quality tenants and owner occupiers looking to live near the new hospital. This is expected to increase equity growth in the area once the hospital is completed.

 

A larger land component of 600m2 as well as being a corner block was also a huge positive as this gives more options for future extensions to the home and/or development. The plan over the next 10yrs is to extend the home from a 3 bed 1 bath to a 4 bed 2 bath.

 

The home had been very well maintained by previous owners with internal painting plus updated kitchen and bathroom in the last couple of years. Carpets in the living area and bedrooms will need to be replaced to increase appeal to renters but are usable in the meantime. Updates are expected to be done in in the next 2 years.

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Post Settlement:

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An external paint, electrical work to update some light switches and replacement of 3 stumps was completed before renting for a total cost of $20,000. 

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Local property managers were assessed and appointed and the property was rented out on a 12 month lease at $495 per week.