Ok so thinking of buying an investment property in the Gold Coast and as per usual depending on who you talk to it is either the best or worst idea ever. I cannot work out whether it is good or bad.
Want a 2 bedder near the beach for around $550k to put on Airbnb.
Just to confirm: I have enough money in my offset to cover buying for cash at this price.
Thoughts?
didn't know you don't get to choose you rental tenants
Past performance is not indicative of future returns. Tenants who have good references can still destroy your place
Yea thats been working well in the last 5 years eh…
I rented an Airbnb with some friends at Noosa a year ago or so. We told them we were a group of 5 21 year olds looking for a relaxing weekend away before uni starts back up. We were actually just trying to find somewhere to get drunk and party for a few days.
If the believed that 5 21 year olds are looking to relax at Noosa without partying they need their heads examined.
Sorry to burst your bubble but It's going to get trashed.
Oh and you'll have zero capital gains. Apartments are in abundant supply and new ones are popping up regularly.
But hey it's your money.
Gee, they've gone up 50% in the last 12 months. And I think they can do it again.
@tonka: And this money will magically appear?
Just look at unit historical prices
Apart from the general hype behind real estate that is petering out, a house has land value, a unit does not. Units also have strata fees lets not forget
Oh and holiday airbnb accommodation went through the roof during covid, now that bali is opened it's going to come back down to earth
@Drakesy: You can get plenty of units with land value. Especially around Gold Coast. Why do you think they advertise some as small blocks. My unit occupies the same footprint as a house, the small block of units occupies a huge block of land. And I've made 2.4 return in 8 years.
Lot's of units on Gold Coast have a big footprint as they were originally holiday accommodation and not so much high density, many only 1 or 2 storey. They were selling for $150K maybe 10 years ago 200m to the beach. You reckon they haven't gone up since then then you're not looking.
@tonka: I dont think units were ever selling for $150k
If they were the developer would've been losing significant amounts of money
@Drakesy: huh? You think every unit was built and sold in the last 12 months? Do you want to think about your last statement a bit more.Feel free to do a bit of research and develop an informed opinion.
@tonka: I'm waiting for the evidence
You made the claim that I could buy a unit for $150k you get to prove it no?
@Drakesy: Here you go.
https://www.realestate.com.au/sold/between-0-150000-in-palm+…
But if you couldn't do that yourself I don't think you are qualified to have the opinion you've been giving.
@Drakesy: If you read the comment from me properly it says 10 years ago! But also now you are arguing data is old and prices go up? Before you were arguing the area had no capital gain.
Now time for you to ante up. Do you even own a property? Do you own one on the Gold Coast? Do you have any local knowledge to back up these opinions. Have you studied the prices there over the years at all?
Assuming you are thinking of an apartment then it would not be an "investment". Apartment value of the GC go nowhere as there is no lack of supply with new apartments being built all of the time.
Also, check out the running costs as I believe there are high council charges
Mot likely you will be lucky to break even after holding costs.
Do a bit of research to see what properties were selling for 7-10 years ago, reckon you will be sadly surprised.
Should have bought a shitbox on chevron a few years back.
Property <> Land
Property will depreciate while the land value goes up.
Mine has gone up 2.4x in 7 years. The key is to buy something good value, not something that is immediately depreciating and the developer is selling at premium. Look around Currumbin maybe. Older unit, in a small block within 500 meters beach. Something bullet proof not fancy.
In Broadbeach today there are 11 buildings under construction, and at least 3 more planning.
Maybe look at the Casino, they are selling their 2nd building and they can manage it for you.
They will manage the rental?
Yeah they will, it's part of their short stay apartment pool if you want to.
@WT: They might do. It's a 50 storey building too. Luckily it's a residential tower first and the you can choose to add to accom pool.
I reckon they would be busy since it's the casino and they have conventions all the time.
Just be careful with that kind of property as usually the resale value is lower than usual apartment.
Harder to get mortgage as well for that kind of property. I read above you dont need mortgage, however for an investment property you will want a mortgage for tax purposes especially if your PPR is not fully paid off.
Yes. The answer is always yes when it comes to investing in property. Buy now ask questions later because the price will probably increase by 20% by the end of the year.
Do it!!!
Not sure if serious….
sounds like a great idea.. let us know how it goes when your apartment is on the news because it got trashed
Will do thanks!
Never involved in ABnb remotely. My friend had inherited property in GC and he was not keen to let it out on long-term lease so that he can enjoy GC during holidays and use it as a part-time holiday home. So he placed the property on Airbnb, fully furnished with all things as if you want to live in and give it out to the Abnb maintenance company who will manage to list, clean, change bedsheets and attend guests since my friend lives in Sydney.
Unfortunately, he has to pay a very high % as management fees are about 18%, Cleaning fees about $ 70 for each changeover.
Over the time he had a few good guests but they always complain and there are tit n bits and when you don't get good review Abnb keen knocking you that either you reduce the price or increase amenities, simple complaints like NBN is slow, lawn in the garden is not mowed recently, painting on walls are not fresh,
Finally, we had a bad time, we had continuous 3 back to back bookings and unfortunately, we found out later that they were booked by the same group and they all had a big party, they smoked pots and cig and burn all furniture, they took over Bose sound system, damage TV remote, break TV screen, crack vanity.
Since they were partying so hard that neighbour complain to the council and the council has written to him either he removes the property from Airbnb or they will bring action against him.
Finally, he decided to rent out the property in long term. When he went to take up the possession he found all items missing and damaged. Airbnb and their agent absolved from responsibility as we have not brought damage and lost to them immediately once the guest went so we cannot pinpoint who has damaged and finally when deep cleaning was being done they found a pack of ice in wardrobe, so we have to lodge police complaint and property was under search and investigation and under that search, they found another haul within the cavity of the roof.
He has to engage hazchem team to give deep clean as REA wants certificate that property is safe for new tenants to lived in and he has to spend another fortune.
luckily all things happened before covid period so he rent out before covid and that has saved his day.
So please avoid Abnb they are not in favour of owners or landlord who are managing remotely.
That sounds a horrible story with Airbnb and i am sorry that happened. In fairness, i am sure there are stories that are good too with zero problems with Airbnb.
Your mind is made up, why are you bothering asking for advice?
Because it isn't made up.
With all the "He" "We"
Which "friend" are we talking about here
under that search, they found another haul within the cavity of the roof.
Should have sold it to pay for the repairs.
Lol Gold Coast.
Go for it, it's only money.
You could have bought a 4bd house, 650m2 block in a central GC suburb for less than 550k 2 years ago….were you not interested in buying then??
That would have been a far better option than an apartment which are basically unlimited in supply once construction catches up. I would advise against it as apartment prices up here are getting pretty ridiculous (like everywhere else). It has taken 10 plus years for some of them to get back to their pre GFC prices so you may be waiting 10 plus years for another decent rise and you will be stuck paying Air BnB costs and body corporate in the meantime.
Now unfortunately houses (and sometimes town houses) are a million dollars even in average suburbs nowhere near the beach - big thanks to the Government for giving away money and doing nothing to curb the rises.
Basically the GC is becoming Sydney/Melbourne without the public transport but with added humidity. Sad times. Thankful i'm not trying to get into the market.
Basically the GC is becoming Sydney/Melbourne without the public transport but with added humidity. Sad times.
Include the "garbage" quality of people moving to Gold Coast recently.
From drug users, drug sellers, party goers, perennial renovators constantly making noisy something, bored retirees doing the lawn three times a week …
Sad times indeed.
🤡
I think you should separate the two ideas:
1. Buy an investment property using money in your offset
- As others have said, the GC is full of developments. I would think the potential for capital gains may be limited by this.
- Using your offset funds means you will effectively pay interest on your home property mortgage. This doesn't equate to taxable deductions on your investment property (which will not have any interest). I recommend discussing with an accountant to decide on the optimum financial structure.
2. List the investment property on AirBnB
- I'm unaware where you are, but you need to consider the management of a AirBnB (or similar) property. These could be costly, and need to be part of the financial analysis when looking at your potential rental values (along with all the other costs).
- Only then can you assess if your required income is exceeded by the market for short term rentals in the GC.
Fair points and thank you for that.
Bigger question is: i have a whole lot in my offset due to an inheritance (around 850k in offset) on a 1.2m loan.
Do i then just leave it?
I am not you.
I recommend discussing with an accountant or financial planner.
I would be looking for acreage, hobby farm etc on a city fringe. Doesn't need to be a capital city but somewhere growing. Always been the best property investment. Maybe check out proposed rail lines or town that would benefit and grow from future fast rail. Ideally something with subdivision potential down the track. If you're paying cash you don't need to rent it out. The income comes from capital gain rent income is negligible in the scheme of it. Maybe you get a jackpot with a future subdivision, but either way the block type becomes rarer as time passes and price goes up.
Depends on your situation (and location), OP.
Airbnb is a lucrative option but very involved/hands-on purely due to the higher turn-over rate and chance of getting 'trashy' renters.
I've experienced first-hand what letting out Airbnb directly is like. The cleaning can be a full-time job with multiple bookings happening at once and little gap between them. Time-management (or readiness to 'scramble and get it done pronto') is critical. Don't even think about doing basic cleanings as this will impact your ratings (and future bookings). Your schedule will revolve around this. You can pay (a lot) for Airbnb agent to take this off your shoulder.
Re. good vs bad quality guests, you can always vet them via their ratings but it's often not straightforward. There are many with few to zero ratings because they don't use Airbnb. Then there are those with good ratings who make a booking on behalf of their friends/family (you can only hope they will respect the account holder's rating). You can still get bad eggs who slip through the net though. It's no fun when your neighbour call you at 3AM informing you of wasted & naked guests lying on property common grounds or public road. This happened to me on a few occasions. I ended up never accepting bookings from certain age groups and group size as those are the ones that gave me grief. Again, an Airbnb agent can take this off your shoulder (for a very high price).
Lastly, don't do Airbnb remotely (even when using an agent). Airbnb is very hands-on. You need to be inspecting the place very regularly and be quick on your feet should something require attention.
used to use AirBnB, but now the markup is too much. Normally I just use the site as a guide, and then check other booking sites if its on there
AirBNB are like rental cars - drive them like you don’t own them.
Don't do it. Read up on the GCCC short term rental council rules…if you want to "run" an airbnb apartment, look elsewhere.
We had a holiday apartment in GC for several years… sold it and didn't make any gains. Would not recommend if you're looking for capital growth. Airbnb - you'd need to organise cleaning, logistics and management (which you can outsource)
1st mistake- apartments are shit investments.
2nd mistake- using your offset to buying your investment property = no tax deductible interest.
Better strategy, say you want to buy a $550k property (preferably not apartment).
What you need to do is use your $570k in offset to pay down your existing loan.
Then ask the bank to set up a separate loan for $570k and use this to buy the investment property + stamp duty + legal cost.
Any interest costs relating to the new loan will be fully tax deductible.
Makes sense! Current situation is having $850k in offset on a $1.2M loan. Options are:
-do nothing
-shares
-property
Based on what you are saying, find good area, buy house with loan from bank, claim interest costs through tax.
I'm not saying shares or property is the way to go for you, but from a tax planning structure, better to buy new investment with separate loan so interest is 100% tax deductible.
-do nothing
This might not be as bad as it sounds. You will be saving money on interest and because you are "saving" rather than "earning" there is no tax paid on it. If you are in the $90-180k tax bracket and paying 2.5% interest on your loan you would need to have a return of >4% from shares/property to be better off. If interest rates go up (as widely predicted) the return from shares/property needs to be even higher. Sure, shares and property have made gains much better than 4% recently but with rising interest rates, high inflation and war breaking out, a guaranteed 4% equivalent return is starting to sound pretty good.
That's a good point. Yes combined salaries of wife and I (with 2 kids which cost a bloody lot!) is over $350k and loan is at 1.9%. And do nothing is easy!
I have enough money in my offset to cover buying for cash at this price.
What? No, do not do that.
You want to maximise the loan for your investment property, so that the interest is tax deductable.
Keep your offset against your primary residence to reduce that non-tax deducatble interest.
I would always buy land + house rather than apartment as 80% of the previous respondents have mentioned, apartments keep being built and in 10 years time your apartment building will look shabby and out of date, not to mention Body corporate fees for the swimming pool that you never use.
We purchased land plus home in a beach side village and Airbnb has been very good for us, providing you can find a cleaner etc you can do alright with the right pricing and minimum booking length e.g. 2 days doesn't suit us so we require 4 days minimum stay to cover our costs and make some money.
If it is too expensive on the GC for land then start looking further out, what about Sunshine Coast etc? I do not know the prices but when we started looking we started driving to different seaside villages to find the right one at the right price.
GC has come and gone, though it may be back sometime. This refers to many low-life residents (as mentioned) particularly short-term renters, GCCC who justifiably have strict rules, and prices. AirBnB has also come and gone. Their prices, rules and we-don't-hold-the-hose attitude makes me wonder why everyone keeps using them as a 'guideline'. Talk to your fin. advisor about the money side. As you haven't mentioned where you live, no point in any more comments.
This article may help you or anyone interested in property investment for renting. You might end up in the airbnb/STA game even if you didn't want to!
https://www.news.com.au/travel/australian-holidays/queenslan…
The moment they can, people are going to head OS…. not AU
I think this is pretty much a reality now.
Seek out your accountant and/or broker on how you should handle those funds.
In terms of GC, sure why not. What are your pros and cons.
DJRE and call it a day, if you're of the belief property values ONLY GO UP!!!!
Fantastic idea.
People are escaping up north so property prices will keep rising.
Grow house might make you more money.
Asking the wrong question in the wrong place
Oh really?
Because of personal experience doing just what this guy is asking, with a much more expensive property (in the same area too, lol), I would have to say the answer is a big fat NO.
Not all hard assets are created equal. They certainly don't damp or pamp the same way.
Some of them went down on Feb 25 2022. Some went sideways and some pamp +25%.
Choose wisely.
Yea, I wouldn't touch any investment properties now. Over the last decade, there has been much much better investments.
If I chose to invest in property back in 2013, I'd lost millions in opportunity cost. Good thing I "chose wisely". Very happy I made the right choice.
Really .
I know someone who played the system living in grannie flats at the back of his builds .
Selling each property as his own house capital gains free and is currently up to multi million dollar houses .
No tax hehe :)
Where that tax free thread again ?
No tax free perk is going beat what I chose in 2013.
I haven't done a stocktake recently, the last I checked I had over $35 mil USD of crypto, this was over a month ago. Let's say I sold all of that into cash, taking the 50% offset for long held assets, I'd still have around $26 mil USD after paying CGT. Zero debt, no mortgage, no credit checks required. Also keep in mind this is unleveraged, property is highly leveraged.
So not gonna chase tax free for a much much lower return.
People that bought hard assets in 2013 isn't worried about CGT.
party goers in your air bnb