Gordon Park Brisbane | Property Case Study

6A Alva Terrace Gordon Park Brisbane Queensland 4031

Buyer’s Brief

To purchase an Investment property (up to $550K) within 10km of the Brisbane CBD that is likely to achieve strong capital growth, good rental returns, has minimal out-of-pocket expenses and no hassles!
Strategy: Buy and Hold.

Your Property Hound’s Solution

  • A freehold 3 bedroom, 2 bathroom, townhouse in the inner-northern suburb of Gordon Park
  • The property was purchased for $492K in October 2011, a massive 10% lower than its August 2007 sale price
  • The property is currently rented at $500 per week
  • The property’s low maintenance, near-new contruction, and high rental return has meant that this investor contributes only $25/week to the holding costs of this property (see following spreadsheet calculation).

Investment Costs:
Purchase Price 492,000
Purchase Costs (stamp duty, loan fees etc) 17,265
Loan Amount 502,265
Interest Only Loan 5.8%
Property Income Expenses:
Rental Income (2% Vacancy Rate) PA 25,480
Rental Expenses (Management fees, rates etc) 4,938
Net Rental Income (Rental Income – Expenses) $20,542
Pre-Tax Cash Flow:
(Net Rental Income – Total Loan Payments) -8,996
Cash Deductions

  • Loan Interest
  • Rental Expenses
  • 29,537
  • 4,938

  • Depreciation on plant
  • Low value pool
  • 6,508
  • 746
Capital allowances 4,408
Tax Credit Calculation:
Tax Loss (deductions – rent) 20,822
Marginal Tax Rate 37%
Tax Credit (Marginal Rate x Tax Loss): 7,704
Annual After Tax Investment (pre-tax cash flow + tax credit):

Why Buy in Gordon Park, Brisbane?

  • Gordon Park is a small, green leafy suburb located 5km north of the Brisbane CBD.
  • Gordon Park is known for its beautifully renovated Queenslander homes making it popular with families and owner-occupiers.
  • The recent completion of the Northern Busway and Airport Link tunnel have significantly improved public transport access to the city and car access to the city, Gold and Sunshine Coast.
  • Gordon Park is bordered by Kedron Brook a popular parkland and bikeway.
Gordon Park Houses Units
Medium Value (2012) $598,500 $351,000
Average Growth Rate (last 10 yrs) 7.2% 7.5%
Current Rental Yield (Sept qtr) 4.6% 5.2%

Suburb Statistics (Residex Nov 2010)
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