SA Investments

Discussion in 'Where to Buy' started by forza10, 6th Sep, 2016.

Join Australia's most dynamic and respected property investment community
  1. Xenia

    Xenia Well-Known Member

    Joined:
    16th Oct, 2015
    Posts:
    3,863
    You can in Christie downs area and surrounds.
     
  2. DaveM

    DaveM Well-Known Member

    Joined:
    14th Jun, 2015
    Posts:
    3,761
    Location:
    Adelaide & Sydney
    Christies is certainly an option at that price point, but at 24km away is well outside 15km from CBD :(
     
  3. Drgonzo

    Drgonzo Well-Known Member

    Joined:
    29th Jun, 2015
    Posts:
    237
    Location:
    Berry NSW
    Why the insistence on a city property? Why 10-15km from the city? Always the same advice this is hardly a novel investing concept. Plenty of money to be made in the right regional areas. I take the point that SA has a different economy to the other states but it will have its moment in the sun eventually and that's when you make good money, not by following the herd mentality of buying close to the CBD, which really offers nothing unique to major suburban or regional centres these days.
     
  4. Balman

    Balman Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    254
    Location:
    Perth
    Looking at the posts it seems Adelaide similar to Perth has a north-south divide among the posters .... as an investor its all about making money rather then having emotional attachments to which part of adelaide you buy in. So when one say 'I prefer the south or north' then you wonder are they really in it for the money..... .

    300k will buy you properties on either sides of Adelaide.
     
  5. 2FAST4U

    2FAST4U Well-Known Member

    Joined:
    3rd Jul, 2015
    Posts:
    2,304
    Location:
    Democratic People's Republic of Australia
    WEST SIDE!!!:p
     
    D.T. and Balman like this.
  6. D.T.

    D.T. Specialist Property Manager Business Member

    Joined:
    3rd Jun, 2015
    Posts:
    9,189
    Location:
    Adelaide and Gold Coast
    South side of city through to extremity is generally more expensive than north side of city through to extremity.

    South on average has a better demographic. But you also have to go further south to match the same price point you would in the north.

    You could argue north has more opportunity and upside as its less developed, bit different people have different opinions / goals / circumstances. I liken it to more like Brisbanes north / south than Perth's.

    Maybe its more noticeble to me as I both live and work in the western suburbs, but west seems to be attracting a lot of owner occupiers and local investors lately. However, most of interstate action seems to be heading toward lower priced stuff.
     
  7. JohnPropChat

    JohnPropChat Well-Known Member

    Joined:
    10th Sep, 2015
    Posts:
    2,293
    Location:
    Middle Earth
    You may want to revise your 5 year target. Adelaide is a slow and steady market. May not be where you want it to be in only 5 years.
     
  8. Yson

    Yson Well-Known Member

    Joined:
    4th Jan, 2016
    Posts:
    361
    Location:
    Sydney
    how is elizabeth doing these days?
     
  9. 2FAST4U

    2FAST4U Well-Known Member

    Joined:
    3rd Jul, 2015
    Posts:
    2,304
    Location:
    Democratic People's Republic of Australia
    Yep. My next purchase will be around Woodville depending on interest rates in 2 years time.
     
  10. Nemo30

    Nemo30 Well-Known Member

    Joined:
    31st Dec, 2015
    Posts:
    596
    Location:
    Somewhere
    I havent noticed that. I think the demographic is different and would suit people differently depending on their strategy. Buying in Elizabeth doesnt suit my risk profile.
     
  11. devank

    devank Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,669
    Location:
    Inner West - Sydney
    Why North or South fight? Given Adelaide prices, why not North & South? :)
     
    spludgey, DaveM, HUGH72 and 1 other person like this.
  12. Erica

    Erica Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    308
    Location:
    Adelaide
    NORTH 25km from Adelaide CBD
    All of the Elizabeth suburbs (inc.Downs, East, Grove, North, Park, Sth, Vale)
    Average 3 bedroom house yield;about 6%
    86 House Sales in the June Q 2016: Median house price $213,000
    69 House Sales in the June Q 2011: Median house sale price $217,000

    SOUTH 25KM from Adelaide CBD
    Morphett Vale
    Average 3 bedroom house rental yield about 5.5%
    82 house sales June Q 2016 : median house price
    $300,000
    98 house sales June Q 2011 : Median House price
    $285,000

    So both suburbs are cash flow positive at the current interest rates, but on face value both have had actually negative capital growth when you factor in inflation over the past 5 years. (I know some people here on PC have bought well below market value in these suburbs so have achieved CG, but the majority of mum and dad investors have bought at market value).

    I've invested $500k in Morphett Vale over the past 5 years and all-though my properties are yielding above average rent return (about 7%), the measly positive cash flow is dwarfed by the capital gain I've achieved with a different property 10km from the CBD over the same time period.

    I'm thinking of selling the 2 down South, and buying another one closer to the CBD, I'm feeling that having my capital tied up in an underperforming investment could be put to better use elsewhere.
     
  13. Flog

    Flog Member

    Joined:
    9th Jul, 2016
    Posts:
    6
    Location:
    South Australia
    Erica,

    Could you elaborate a bit further on your projected yields for those suburbs? These would be gross not net yield?

    Considering they're hovering at the 6% mark, you wouldn't be making a lot of money would you?
     
  14. devank

    devank Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,669
    Location:
    Inner West - Sydney
    I don't know enough about SA. I only monitor two places I bought a year ago: @D.T. helped me to buy these two.
    Here is a recent real life example for North & South.

    Paralowie ( North side) - Bought a house for 215K. Renting for $280 pw (D.T. is managing now).
    upload_2016-9-8_21-52-20.png
    That is about 7.6% increase.


    Morphett Vale (South side) - Bought a house for 235K. Renting for $270 pw .
    upload_2016-9-8_21-56-27.png
    That is about 4.8% increase.

    I'm okay with that level of combined capital growth and cash flow. Also, it provides an element of diversity.
     
    Last edited: 8th Sep, 2016
    HUGH72, D.T., 2FAST4U and 1 other person like this.
  15. Nemo30

    Nemo30 Well-Known Member

    Joined:
    31st Dec, 2015
    Posts:
    596
    Location:
    Somewhere
    Devank - I own a house in a street opposite yours in Morphett Vale. Yours would be worth $275k easily and you could probably get rent closer to $300pw
     
    devank likes this.
  16. C-mac

    C-mac Well-Known Member

    Joined:
    26th Jun, 2015
    Posts:
    1,348
    Location:
    Sydney
    Devank be careful with onthehouse data (looks like thats where you sourced the numbers?). Though they have their own low / medium / high accuracy grading, I'd wager that all of them tend to overinflate values slightly.

    As for the poster with the two 2011 deals and lack of growth, maybe you should consider the possibility that their time in the CG sun may come in the coming few years ahead? I reckon you should do more digging before palming them off. Exit costs and entry costs into next buy need to also be factored in.
     
    Mick Butterfield likes this.
  17. Erica

    Erica Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    308
    Location:
    Adelaide
    Hi Flog,
    My quoted rental yields are from SQM's free research;
    median asking prices for a 3 bed house VS median rent asking prices for a 3 bedroom house.

    But each individual property purchase however will vary greatly in the actual investments return depending on the various factors like depreciation/ age of property/ location / what income bracket you are in/ maintenance costs, etc etc.

    I've achieved above average rent return because I've put in the extra effort to subdivide and built + retain and renovated the original property. Others on PC have bought well- below market value (I've never managed to), and then done cosmetic reno's.

    For my $500k investment in the 2 properties in Morphett Vale, this financial year's return (that is after all taxes and all costs are paid) was $10k cash in hand.
     
  18. Brady

    Brady Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,561
    Location:
    Adelaide, SA
    If @devank want's the PM me the address happy to do a desktop valuation on each property - would that satisfy @C-mac ?

    Don't know what he purchased but he's valuations provided sound about right
     
  19. D.T.

    D.T. Specialist Property Manager Business Member

    Joined:
    3rd Jun, 2015
    Posts:
    9,189
    Location:
    Adelaide and Gold Coast
    We have an IP in the same section of MV and when we did an internal refi with CBA they did a full val and said 280k. Similar stuff is selling for 300k. His isn't renovated though so I'd say a bit less, but not as low as his info graphic suggests.
     
  20. Brady

    Brady Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,561
    Location:
    Adelaide, SA
    Yes the graphs looked a low to me - whereas @C-mac was thinking they were likely inflated.