SA Elizabeth SA Mega-thread continued..

Please sell at that price! I bought one on the same road much closer to Elizabeth Shopping Centre for 151k and 950 sqm land 2 years ago.

 

TBH you will not see quick capital growth and it doesn't seem that you can do much to the property (renovations) to substantially increase the value anytime soon to draw out equity for PPoR.

If I were you, I'd go for the affordable home houses, usually underpriced and you can have equity gain from day one if it is the right property.

 

True. To his credit the photos/presentation of the house do look better than the last agent it was advertised through. Still it is pretty ambitious to hike the price that much and expect someone to take the bait. Occasionally Ray White price properties competitively; however, I’ve seen some shockers- a couple of places in Pooraka and Edwardstown come to mind, which are never going to sell and have been on realestate.com for months…Who knows some poor mug might purchase it though.

 

Is that the agent though or unreasonable vendor expectations?

 

Is the equity gained through doing renovations?

From what I’ve seen with the AHP a lot of the houses that get sold off are all in the same/surrounding streets. Unless there are lot of private residents selling at the same time in the vicinity (increasing the market value) the desktop valuations come back disappointing as they take into account recent sales/similar properties. That’s been my experience anyway.

 

Probably a bit of both. However, I don’t see why agents would bother taking up unrealistic listings in the first place. If a house is only worth 330k why would you put it on the market for 400k? Surely you’d negotiate with the vendor and give a more accurate appraisal to at least try and get a sale?

 

There's one for sale I've been following. Its thru an agent I've bought off of previously. They're asking higher than market and happy to hold as it c.f.+ , they're essentially waiting for a sucker to come along.

I just follow up with him every couple months to see if expectations have changed.

 

Thanks for the feedback, really appreciate it, and all the posts you make on this website! I've only been lurking for a week or so and I've already learnt so much.

Yeah, affordable homes seems to be a good idea. My understanding of it is you have to be quick though, as the best places get snapped up very quickly and it's first come, first served.

 

Exactly right - I've financed quite a few clients who have bought into this program - you need to be sitting there refreshing the screen. We've come across ones where the property is locked down by a buyer within 10 minutes of listing.

 

Hi ART
The place appears to be nicely renovated with plenty of depreciation to claim on the fixtures and kitchen, a decent size block. But.... the main problem is the third bedroom which doesn't seem to be accessible from inside the house? This would put off many likely tenants who would be families. It looks like it may have been a 2 bedroom place perviously.
It's a little small as well, 90-100 Sqm would be better but it's also priced appropriately and I'm only guessing but I think it would likely rent for 260-270 per week?

 

If you check the floor plan, its only 80 sqm

Judging by the pics, I think the one with the concrete slab floor is the 3rd bedroom, so its probably a verandah conversion.

The good condition would make it easier to let, but the size and 3rd bedroom situation would likely put it at the bottom of the price bracket. I'd say more like $245-$250 maybe.

 

It would almost be worthwhile for the owner of the house to enclose the rear bedroom so its part of the house. Then it would be more appealing and that would also increase the floor space slightly.
I'm getting 280 pw for a slightly larger place (100sqm) which is in similar condition to this.

 

Yes, this would be beneficial. Looking at the floor plan, I'm not sure how they could since it backs onto the other bedroom?

They gave a range of $250-280 in the ad, which they're not allowed to do unless they had an appraisal done; it's size is similar to that of a semi/duplex so I think it'd be at the lower end of that bracket. If you look up 22 Brunton in Eliz North, that was renovated (but not quite as well) and achieves $245 per week.

For yours, 100sqm is fairly average for the area, so good condition makes it worth about $270 per week. I assume you increased yours over time rather than attracting a new tenant at that level?

 

I didn't realise that, interesting! Will keep that in mind in future readings. Agree that wouldn't want to overestimate rental return and then end up disappointed... Just have to keep telling myself not to get attached to the nice new floorboards Compared to some of the other places in a similar price bracket though it's certainly cosmetically appealing at least!

Probably, as Hugh72 pointed out, this property would be great to buy for someone with the know-how and wherewithal to renovate the 3rd bedroom into the house and extend the actual size of the property. Unfortunately we're not quite at that stage where we can commit to something like that... ah well, back to the old mouldy $170k blocks it is then

 

Buy ugly ducklings and turn them into swans.
Buying swans is bad value

 

It wouldn't be cost effective most likely as the verandah would need to be enclosed allowing internal access to bedroom 3. A lot of expense for a little gain so probably not worth it unless the price is right.
The one I bought rented initially for 275 pw and the tenants have just signed again for 280 pw plus they pay for water. Solid 8%+ yield.
It doesn't need any work, the block could most likely be subdivided but I can't see any margin in doing so in the near future. I'm happy just to hold in Elizabeth and contemplate a development elsewhere where land values are much higher... unless I can get a block for a steal like your development that is.

 

And people scoff at buying in Adelaide

 

Checked out this today

34 Snell Avenue Hillbank SA 5112 - House for Sale #121388798 - realestate.com.au

Cheap for the area. Needs work, was a rental and the tenants have done a number on it.

 

What did tenants do to it?

 

Had abit of this going on

A lot of original 70's features. Kitchen also original and horrible. lots of cosmetic work mostly, holes in ceiling etc. solid brick house so not too many holes. Agent reckons he will get 200k easy as said a lot of foreigners are interested