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

No its not. Owned by a fellow forum member.

 

Interesting find

How much do you think it's worth?

The property is currently leased to two tenants with an estimated passing net income of some $305,339
per annum excluding GST. Tenancy details are as follows:
Traffi c Creative Pty Ltd Tea Too Pty Ltd
Current Rent: $22,335.24 $294,916.08
Area (sqm) approx: 95 198
Current Term: Monthly 7 years
Commencement Date: 17/10/2006 6/06/2011
Expiry Date: Monthly (holding over) 5/06/2018
Review: CPI Adelaide (All Groups) Fixed 4%
Further Term: Monthly 7 years
Outgoings Recoverable: All outgoings excluding land tax All outgoings excluding land tax
Financial Summary
Provided below are details of the GST exclusive revenue and estimated expenses for the subject
property:
Gross Annual Income
Traffi c Creative: $ 22,335.24
Tea 2: $294,916.08
Total Gross Annual Income: $317,251.32
Less non-recoverable outgoings (Land Tax): $ 11,912.50
Estimated Net Annual Income $305,338.82
Estimated Recoverable Outgoings (2016/2017)
Council Rates: $ 11,498
SA Water: $ 3,936
ESL: $ 2,759
Insurance: $ 4,546
Total Recoverable Outgoings: $ 22,739

 

Thank you for that.

Are the following still the top savings accounts?

• ME Online Savings Account
• ING DIRECT Savings Maximiser
  
• RAMS Saver Account

 

Thank you Dave.

Would you recommend I look at purchasing a yielder first?

 

Depends on what your broker has mapped out for lending options and order you need to buy in.

 

Thanks for that. I don't have a particular order that I must follow.

 

Which means you haven't got your lending strategy reviewed as yet? What DaveM would be referring to is that it is prudent to review your lending situation and how that relates to the purchases you make. Whilst it may seem a good idea to buy x property, it may inhibit your ability to build a portfolio.

In terms of strategy as per the original post? That's up to you. You've got a significant amount of funds to play with, so structured right you should have the potential to get 1-2mil in property which can give you some serious options for your longer term retirement.

 

Totally agree, a 10.4% return looks great on paper but when in actual figures its only 200pw it just doesn't get you very far.
I recently looked at this part of Adelaide from purely a cashflow perspective and while the % returns were good, the actual positive cashflow in dollar terms was merely 1-3k per year. Hardly a cash cow and considering the most likely limited growth of the area wasn't worth the investment for me.

 

Where did you go instead @Connor?

 

Na I haven't purchased yet, but i'll most likely look at doing a dual occ in a larger regional. That way i'll get a good yield and manufacture some equity as well.

 

IMHO, what Adelaide offers over other capital cities is its affordability close to metro beaches. Id be looking there.