Rental Properties Brisbane

Rental properties - Brisbane rental properties in particular - are a great investment option for people over 40 who want to quickly improve their financial position prior to retirement.

As an investor in Brisbane residential rental real estate you can expect to invest a relatively modest amount in order to control your investment property.

In most cases the ongoing costs of rental properties in Brisbane are covered about 50%.

Tax benefits cover another 25%-33% of the cost, and you, the investor, pay the balance of between 17-25% of the cost.

Putting things another way, if you can contribute around $220 per week towards rental properties in Brisbane without impacting adversely on your current lifestyle, you can control a residential rental property valued at around $380,000.

After 8 years your weekly contribution should be totally eliminated via tax benefits and rent increases (assuming a $30 per week rent increase each year).

By that time your cash contribution towards your Brisbane rental property investment, initially valued at (say) $380,000, would be about $45,000.

So, from about 8 years your investments in rental properties in Brisbane are self-funding.

As a comparison - over 8 years you could easily spend more buying and maintaining a car!

Of course cars lose their value - unlike rental properties in Brisbane.

If the historical long term trends continue, the value of a Brisbane residential rental property should at least double within 10 years.

Using the example above, this means that you should on average be earning $38,000 each year - about 10% capital growth - on every investment property in your Brisbane portfolio.

For the foreseeable future we believe the best investment properties in Queensland are Brisbane rental properties.

Here's why:

1. Queensland prides itself on being a "low tax" state. For property investors, this means savings in land tax of up to $7000 each year when compared to other states in Australia.

2. Brisbane is expected to have the fastest growth in property values in the next few years. While this in itself is an important factor, real estate rent in Brisbane is relatively higher than other parts of Australia. It is the combination of higher rental returns coupled with faster growth and lower taxes that make investing in Brisbane rental properties a great choice. (This does not necessarily apply to commercial real estate.)

3. Several suburbs in south Brisbane are part of a "growth corridor". There is a solid core of jobs in and adjacent economic zone, so there is a far lower degree of risk there. That is because the jobs market drives the market for rental properties. A tenant typically finds a job and then looks for a nice family home within a moderate travel time - especially with the rising cost of petrol!

Still not convinced about the idea of investing in south Brisbane rental properties?

1. As at June 2008, according to the Real Estate Institute of Australia (REIA), overall Brisbane Rental Property statistics were:

Rental Properties Brisbane - Number of Vacancies 3150
Rental Properties Brisbane - Vacancy Rate 1.3%

According to the REIA, "Vacancy rates of less than 3 per cent tend to show strong demand for rental properties – and give landlords an excuse to raise rents - while vacancies of higher than 3% tend to show an oversupply of properties." 

2. The shortage of rental accommodation properties in Brisbane is unlikely to change any time soon.

In July 2008, Housing Industry Association (HIA) Chief Economist, Harley Dale, said that the June update confirmed a seventh consecutive trend decline for building approvals, signalling a weakening in residential construction over the second half of 2008.

"The responsiveness of supply to growing demand has been crippled by draconian regulation, ridiculous tax grabs, restrictive land release programs, and a failure to deliver required industry skill packages," added Mr Dale. 

These are infrastructure problems that will not get solved overnight.

So, not only is there a demand for Brisbane rental properties, this demand is not going away any time soon.

Now in his 60's, Bernard, our trusted advisor has been helping people to sort out their retirement options for over 15 years.

To find out how you can set yourself up for a dignified retirement, click here to contact Bernard right now.

Bernard will then call you for an obligation-free - and 100% confidential chat - about your own situation.