SA Elizabeth SA Mega-thread continued..

I've spotted something in Davoren Park, almost 800m2 corner block for around the same price as the thing I've bought in Smithfield Plains...kinda tempted to pull the trigger if everything stacks up to be.

 

It'd need to be even lower than that for me to show interest. It'd also need to have immediately accessible equity.

 

The Davoren Park tenant pool is like the bottom of the barrel, except you have dug through the bottom of the barrel, through the garden manure under it, and then found some long fossilised dinosaur poop under 30m of worm poo.

 

Wouldn't be this one, by chance?
http://www.realestate.com.au/property-house-sa-davoren+park-120080937

 

Bad experience I assume?

 

Yep that one. Chances are it's already under contract as I recall the inspection is Saturday but no time/date listed now.

 

what would the land value be on something like that? ie what are you paying for the house?

 

I quizzed northern Adelaide guru Corey Batt on this property and he pointed out that the current rent is well above market; and that Davoren Park is the worst suburb in the greater metropolitan area.

 

Hey guys need opinion on what to do.

My gf bought a property in Andrews Farm in 2009 for 230k.
3 bedroom 1 bathroom 560sqm block. Probably not big enough for sub division. Gets 270pw rent.

It is just off of Curtis road, one of the older houses of Andrews Farm.

At the time was probably a good buy. But the area has seen no growth and I think it is becoming worse with time, like the next Davoren Park. Have had appraisal of 240-245k.

She is thinking of selling it and then buying 2 cheaper property's in Elizabeth that are positive cashflow and on bigger subdividable blocks of land. Have seen some good ones for 170k the last couple months.

Just don't see much potential in areas like Andrews Farm and Munno Para when they are on small block of land and money could be working better in other areas

Opinions?

 

After sellings costs are you sure she would have enough left over to buy two in Elizabeth? Remember that the quality of tenant is likely to be lower in Elizabeth & it is possible that the maintenance could be higher depending on the age of the build.

Current yield is approximately 5.8%, while a elizabeth place would be circa 7.3% (based on 170k buy, 240/wk rent). Is the extra 1.5% worth it? As to which has the better capital gain potential, you're on your own with that one

 

Hi,

Yes will be able to buy 2 in Elizabeth after selling.

I just don't see much positive of holding a property that cost and extra 70k when the rent is the same and the block is not able to be developed one day...

Thanks for opinion

 

I'm not overly bullish on Andrews Farm, as you've touched on unlike the ex housing trust areas of Elizabeth/Smithfield there is no gentrification potential, and it's right on the outer fringes with new builds popping up to stifle growth. In saying that, i'd also be wary of buying yield just for yield sake - before you know it you're buying single side semi's in Davoren Park.

Development potential in Elizabeth isn't cost effective for most properties at this time, so make sure the fundamentals really stack up to allow (your gf) to purchase again from rising equity.

 

Hi Corey,

I don't buy single sided semis for yield of that's what you mean.

I always look for big blocks of land 750sqm+ that I know are able to be developed one day and are cashflow positive from purchased.

As for Andrews Farm it does not have these qualities of +CF or land or in my opinion potential for CG which is why she is wanting to sell.

 

Selling and then buying again is fairly pointless and just lines the coffers of state govt. It was a fairly poor investment, but capital gain going forward for either (or any) location is all crystall ball stuff.

Is there any scope to tart up the place a bit? If so i'd look to do that. It'd then give you some equity to get into one of those Eliz places you like with which you can do the same. This way you'd end up with your 2 Eliz places without selling.

 

Hi DT,

Could put a new kitchen + paint to freshen it up. And might be able to refinance and buy in Elizabeth still.

I'm not for lining the pockets of the gov with SD
but what is the point of holding an investment you don't see gaining on?

If you can get out and put your money into something that performs better is that a bad thing?

 

What is the min land size requirement for sub division is SA ?
Thanks

 

Each council is different, some allow tiny 150sqm blocks, others will have min requirements of 2000sqm. Overall the trend is to increasing density across the councils - Adelaide's avg lot size was 600qm in 2000, and is currently hovering at 375sqm. Playford Council (the council covering Elizabeth, Smithfield, Davoren Park, Andrews Farm, Munno Para and surrounds) has the vast majority of the area zoned as medium density, allowing some of the tiniest blocks in the State.

 

Just got an email from an agent in response to a query I made about rental market in Elizabeth. His reply was 'I am not a property manager so I can't be accurate'. Does that sound like something a sales agent would say when a potential buyer makes an inquiry? Wouldn't it have been better to ask the PM in his office?

 

Bad news for Elizabeth!

The Lousiana Tavern at Elizabeth shopping centre has closed its doors.

I blame the high rent of the shopping centre along with the far to cheap food prices.

Being in hospitality myself, I for one know there is no money in selling a schnitzel for $10 regardless of how many you sell.

A lot of food businesses all around SA are finding it hard the last couple years with rising costs of products, wages, utilities.

Hopefully someone steps in and reopens soon.

 

Seems fairly honest or perhaps he has gotten caught exaggerating before. Usually they would just tell you a rental amount about $40 higher than the average, but he probably doesn't want to put it in writing. Give him a call I bet it is a different story!