SA Elizabeth Property 2019

10% yield, really? Have prices dropped or rents gone up since I bought or is this just a bad piece of journalism?

 

no mention of 10% yield in the article except for

"Nerida Consibee said each of the six suburbs in Adelaide’s north were also recording price growth of more than 10 per cent"

 

I've got two in Elizabeth. Rents are $230 & $235. Not quite 10% but maybe 8.5% on purchase price.

 

It's got to be on current purchase price, not what you paid for it years ago.

Mine at current market if i still them would be
140k $225 rent 8.4%
150k $250 rent 8.6%

 

Duplexes?

Salisbury has grown 10% not sure about Lizbef though

 

140k was duplex
150k was free standing

 

No growth to mention. Current purchase price would be similar to original purchase price.

 

My bad!

It's going to be interesting to see what happens to high yield properties like this as the rates continue to tumble. I'm guessing at some stage there'll be increased interest.

 

Some really bad houses on that list. You'd be mad to buy one side of a duplex in Playford.

 

I had one, and it was the best one of my lot!
I tried buying the other side but no avail

 

@TMNT Your experiences in the area sound very bad.
I only have 1 IP in the area but touchwood it has been pretty good so far. I've had 2 tenants, both paid on time and looked after the place.
Yield on purchase is 7.4% and I don't have to worry about repayments, which is good because I'm not a high income earner and can't afford to have a negative cashflow property.

In terms of CG, it's going steady, doing what the overall market is doing. But I only care about the CG at the time of selling in 10 to 15 years. If it has good growth before that, it's a bonus. If it doesn't grow at all in 15 years, fingers crossed at least the rent goes up, which will make it a good income stream worth keeping.

Curious, what did you do with the funds from the sale of your properties in the area? Did you end up getting better returns elsewhere?

 

ill admit my experiences werent great, however had the CG been there I wouldnt have mind

I had mine for about 5-6 years, and it saw virtually zero growth,
sure if the properties shot up in the next few years, it would be good for you

but im not the only one but even some agents have said in 10 years theres been no growth, negative growth depending on when you purhcased

will you have any regrets if in 10 years time there is no growth still?

 

Of course I'd be disappointed if it doesn't have good growth in another 10 to 15 years. However if all other areas grow, playford would be massively undervalued not having grown in 20 years.

So have you invested the funds since?

 

oops forgot to answer,
I ve put a bit of the funds into offset
I also bought a old corvette
looking for a PPOR in melbournes east and/or starting a business

 

It will never be "massively under-valued" - the values reflect the fact that there's an extremely high level of welfare dependency and no good jobs out there. And that situation will never change.

The best thing that could happen for Elizabeth/Munno Para would be the construction of a new prison out there to create jobs and lock up our skyrocketing prison populations - seemed to have worked in Lara (VIC).

 

It's like agents currently spruiking Norlane or Corio - where are the jobs going to come from that will drive capital growth? These places are a dumping ground for the welfare-dependent and there simply isn't any industry or development going to happen that will create jobs to turn it around.

Can you think of any new 'industry' in Geelong that isn't the result of direct government spending? As with Adelaide's north, private sector job creation is nil. Not a good sign for the future in my opinion.

 

Police scour scene for alleged murder weapon

Just another day in elizbaeth

 

Paywall.

I obviously know that there are issues in the area and that it didn't work out for you, but I'm still a big fan. If banks lent me money, I'd buy more in the area.
While it's after a 20% deposit, I just had a look and on aggregate, my Elizabeth properties (I've got 5 with 6 tenancies) had a slightly positive cashflow before depreciation, and that's with one of them making nearly a $5k loss due to having a bad tenant. So it's not costing me any money to hold them and eventually either their rents or their values will go up.

 

@Ben Chifley the properties in the area are already paying for themselves. My rent comes directly from centrelink, it means I don't have to worry about the tenant paying on time. The rents cover all costs, so I'm basically getting an IP for free.

Neither you nor I know what the values are going to be in 15 years but based on the past, the values in the area are capable of increasing. Look what happened in Tasmania, everyone wrote it off as a basket case because values hadn't gone up in 10 years and unemployment was high, but it did get to a point where it was ''massively under-valued'' and it started attracting investors from all over the country, so it could happen.

Playford if forecasted to have higher population growth compared to other parts of Adelaide and the council is investing to improve the area.

Investment Strategy Overview · City of Playford

 

im not bitter about elizabeth, if I get my money back, there is an opportunity cost , however its not a loss so im not too concered, ive learnt heaps, 10 years ago had I read the original article, I probably would have jumped in, but now I can identify the bias

ive had worse areas

the councils arent stupid, tehy have pumped a lot of money into the area, and have big dreams, they wouldnt be doing if it was going to fizzle out, but as #willair mentioned, there is a huge dependancy on welfare, and there is still a lot of land out there,
eventually it will be fine, but when that will happen, is another consideration