SA $400,000 deposit. Where and what to buy in Adelaide, SA?

Hi all

I have a $400,000 deposit and would like to purchase one or more investment properties. I'm 33, single and no kids. I earn $80,000 and will continue renting as I prefer to live in an inexpensive and small unit as it meets my requirements perfectly. I do not have any debt at the moment and my living expenses are around 50% of my take home pay.. I have built before and would not be afraid to purchase something that needs renovating. I am not eligible for the FHOG.

I want to live a comfortable life and would like to invest in such a way so that I do not need to dig into my income in order to meet minimum mortgage repayments. I would obviously have an offset account and have my pay going towards the same, I just want to live a comfortable life and not have to rely on having to use the money from my income. Ideally, I would like rent to cover the minimum mortgage repayments. I would be ok with rent not covering the general maintenance or rates and other bills associated with the properties.

I am currently living in the Eastern suburbs and if I was to one day have kids, I would like to stay in this area because of the schools it offers. Having said this, I am open to any area of Adelaide as long as it's financially the right choice.

I would appreciate any advice as to where, what and how many properties I should invest in.

Many thanks in advance

 

Nice!

I think its well worth reading through the suburb reviews on here first adelaide suburb review | PropertyChat and that'll give you a bit of idea of what others are thinking. That can help you narrow it down some before asking some more specific questions

 

Thank you D.T. Very useful resources there!!!

Is there a sub forum where I would be best to ask for some specifically financial advice, as to how I should split my deposit and how many properties to invest in?

 

What are your thoughts on 18 Leroy Street Glenunga SA 5064 - House for Sale #124141134 - realestate.com.au
?

 

Best to talk to a Mortgage Broker about that sorta thing. @Corey Batt is based in Norwood so essentially your neck of the woods!

Go meet with him and run your numbers by him - he'll be able to advise how much you can borrow and based on that how many you might be able to buy. Then once you have we can look after them for you.

 

Should buy 15 ip in Elizabeth. You would well be well on your way to a news article then

But seriously with that sort of deposit you have many options. Research before you jump int anything

 

Also get some good structure and accountancy advice before jumping into buying multiple properties. There is land tax to consider and there maybe some solid reasoning behind staggering purchases over 2 financial years or just lumping them into 1.

@DaveM does BA work in Adelaide
@Corey Batt does broking and financial planning in his company
@D.T. does property management

All 3 will have some good contacts for accountants, lawyers, conveyancers etc that you may need.

 

#squadgoals.

As the kids would say...

 

You might come up a little short on the deposit but this one's interesting

 

I'm going to go against the grain here and ask: why you have selected Adelaide as your preferred investment city? And why now?

If it were me, I would hold onto your 400k for a year or two and do as much research as possible by reading this forum, magazines, books and follow all the websites of Terry Ryder, Margaret Lomas, etc., for some guidance and ideas. Look at the historical trends of ALL capital cities and then consider where you'd like to invest.

Keep your options open regarding ALL cities and different property types, as I suspect (and please correct me if I'm wrong), the Adelaide investment decision might be flavoured by some emotion?

 

Wow... Nice.
When is the South part coming out?

 

$400k deposit? Answer to your question - don't buy in Adelaide.

 

With 400k I would look at 2 x yielders and 1 x high growth property, using the surplus cash from the yielders to offset the negative cashflow from the high growth property

As you want to stay east to live, the high growth could also be a future ppor as the east is in a strong growth phase

 

I know you post is in jest but my parents are looking for IPs in these areas and have run into a bit of a problem with the numbers. With these high yielding but low rent properties, the fixed costs are blowing the numbers right out. For example, you can purchase an IP for around $100k that is returning $200 pw rent. On the face of it, that looks like a 10.4% return. Looks good? The problems are:
- rates (~$1,000)
- water and sewer (~$300)
- insurance
- management fees

I'm not sure about insurance and management fees but just rates, water and sewer alone represent 12.50% of the rent. These costs won't increase significantly for a property rented out for $300 pw, in which case they drop to 8%.

I don't know these areas at all, so @D.T. will able to correct me if I am wrong. Just raising it as a risk with the cheapie strategy for Adelaide's Northern suburbs.

 

I usually allow $2500 per year in outgoings for an Elizabeth house

 

That sounds about right. So if the annual rent is ~$10k, you would pocket ~$7.5k (and hope for no repairs).

 

Yea pretty much. Council rates have gone up each year the last 3 years most houses are about $1350 per year.

Also you said about buying a 100k property? I'm guessing you mean a semi? I would avoid these. Look for a house. The key is to find tenants that work ( can be tricky in Lizzy) they are generally more responsable than dole bludgers

 

I know of a pair of semis in liz for sale atm 285k rent 410pw

 

Western suburbs due to affordability and scarcity. I have a thread on it somewhere.
Happy to chat

 

Is that yours?