Expert insight: The best strategies for investing in Brisbane properties today

With a significant reduction in building commencements and a sustained population growth, Brisbane presents strong fundamentals for property investment.

“Generally, if we’re looking at the fundamental drivers of property prices, we’ve got supply that’s going to be drying up and an accelerating population growth. If we can see some employment growth and wages growth, I think that we’ve got the perfect recipe for upward pressure on prices,” Ms Jennison said.

At the moment, the buyer’s agent duo takes advantage of the latest city plan in order to help their clients maximise their capital.

“In the 2014 city plan in Brisbane, they released a new little tweak where we can now subdivide some smaller 600 square meter blocks of land. There are certain requirements that must be fulfilled in order to qualify a property for that type of subdivision, but a lot of people don’t know about that tweak in the city plan,” she said.

“We have picked up a couple of those types of opportunities for clients just recently. This type of property allows clients to lock in the future subdivision potential.”

Apart from future development potential, they also recommend investing in properties within “fringe suburbs” near train lines, where yields continue to be strong and entry points remain as low as $600,000 to $750,000.

According to Ms Jennison: “Right now, we’re sitting in fringe suburbs, or those that are right on the edge of some of the blue chip locations. They're still achieving yields of around 4.5  per cent to 4.7 per cent, which is quite a strong yield for an area that is still only 13 kilometres to 14 kilometres from the CBD.”

Property purchase checklist

Mr Jennison said that, across Brisbane, properties with future development potential would be among the best bets for property investors looking to achieve significant growth.

Essentially, blocks that can be split or subdivided offer good chances for growth, according to him.

When looking at this type of property, the buyer’s agent strongly advised investors to pay attention to the site’s stormwater system.

“We want to make sure that the stormwater can get away from the site, so generally, we’re looking at flat sites… Stormwater is quite critical to get it away,” according to Mr Jennison.

“But then again, that’s just one small part of the feasibility when we do the costings on the project in the future.”

Infrastructure and amenities should also be present near the area, including transportation, shops, schools and important service providers.

“Practical things, of course, should be there. Is there water? Is there sewer? Is there power? All those types of things will affect future development, whether it’s for the investor or if they sell it to somebody else,” he highlighted.

Splitting blocks

Like all investment strategies, splitting or subdividing blocks is not a “one-size-fits-all” strategy. If not done properly, the investment may easily go bust.

Apart from the investor’s goals, capabilities and limitations, both personal and financial, Mr Jennison also strongly encouraged doing due diligence on the factors that may affect the value of the site during and after the development.

To be certain that they are looking at all the right things, the buyer’s agent recommended engaging professionals, where appropriate, particularly those that have an intimate local knowledge of the market.

“Just know what to look for. It’s hard to pinpoint certain things, but there are several factors that could really affect the value of that site. There’s flood, council plans, overlays, services – all those things really add up, and even the small things can really cost a lot of money,” Mr Jennison said.

Once into the development process, the involvement of property professionals and tradespeople such as carpenters, plumbers, electricians and project managers could become more critical.

As such, Mr Jennison advised engaging those with the skill set and qualifications necessary, as well as significant experience and even some “scar tissue”. The years spent on the trade will have allowed these professionals to build relationships with trustworthy tradespeople, thus ensuring quality and fair pricing for the investor.

“Professionals can actually take them down the next step, like organise development approvals, building approvals, pricing for the build. All the project management steps that will ensure that it’s a smooth process for them,” he said.

Tune in to Melinda and Scott Jennison’s episode on The Smart Property Investment Show to know more about the best strategies that can help investors maximise opportunities in the Brisbane property market.