SA Cashflow Unit near Flinders University

Hi all,

27/2 Ayliffes Road, St Marys, SA 5042
https://www.realestate.com.au/property-house-sa-st+marys-134406934

Thought I’d share this unit that’s currently for sale that I came across. In terms of a pure cash flow play at $155k and $265pw rent you are looking at a very low start up deposit ($22k @90LVR) and would likely pay for itself easily with $82pw interest @3% (pending what the strata fees and other costs are).

This unit is near Flinders Uni and hospital, Marion shopping centre, and the Tonsley Innovation District. It’s not a low SES area (not high either) but could attract a better type of tenants compared to Elizabeth/Salisbury in the same price bracket. Despite this, I don’t expect any capital growth.

Building profile: Building profile - 2 Ayliffes Rd, St Marys SA 5042

Sharing for info and comments/thoughts.

 

The drawing and the supposed size don't match up. If the drawing is correct, it looks to me like it might be below 50 m^2, which makes borrowing harder.



Also, if it's targeted towards uni students, you might have vacancies during non-lecture periods, particularly if they have semesters over trimesters.
You'll also have a high turnover rate.

You can get a similar price and rental point in Elizabeth, as you alluded to. Personally, that would be my preference. The location of this place is obviously better, but there's only a tiny land component and virtually no way to value add later.

 

Thanks for the feedback. All valid points. I was surprised that they were claiming 60sqm based on the plan.

 

Sometimes they include parts of the common areas?

 

For the sake of a few dollars per week of cashflow (and probably none once it hits P&I), is it really worth the risk? Better off buying MLT or ARG or one of the LICs if cashflow is your focus.

I'd rather buy a developable block in adjacent Mitchell Park for $450K and endure negative cashflow.

 

I disagree on the size. It's basically identical to the layout of the Granny Flat a friend built to house her parents, which was exactly 60m2, so the size could be correct.

Looking at the building profile, there's 55% Owner Occupiers, so not specifically targeted at Student Accomodation.

It looks like it's been recently renovated, so there should be limited maintenance costs as well as depreciation.

While it's not something I'd buy, it could be good for someone starting out, and in a much better area than Elizabeth. This isn't advice though, so do your DD, and don't rely on people you don't know on an internet forum.

 

Spot on. This is necessarily for myself, as I have an existing portfolio. Just wanted to gain some objective thoughts and this has been really helpful. I agree this may be a good option for someone trying to break into property investing, with very little start up cost. Ideally, you'd buy something with some value add/land component if equity/deposit allowed.

 

If you add the sizes of the two bedrooms and the living room, you come up 28m^2 short. The bathroom, hallway and kitchen don't look like they'd constitute nearly half the floor area in this place.
Also note that each bedroom is under 10m^2, which is rather small! Would you happen to remember what they were at your friend's granny flat?

 

The m2 for the balcony wouldnt even add enough.
I took the living space of 3.4 x 5.2....17.7m2 and doubled it (each of two sides in same width). I get under 40m2 excluding balcony and robe. Maybe they have included the common area entitlements?

Dont count on students. Covid issues mean student numbers will remain low. Studios around unis will be impacted for some time

 

No, I have to admit, I don't know what the dimensions of the g/f are. I was just looking at the visuals and thought to myself "Oh, that look's like XX's place".