Thoughts on Adelaide for Capital growth 500k-600k

Hey guys,

I am looking to buy an IP in the range of 500k-600k and working with a buyers agent on the purchase.

Main aim from the purchase :
1. Good capital growth, some momentum in short term to enable equity pull out for next purchase and decent long term growth.
2. Rental yield > 4.5%
3. Planning to buy and hold and not flip or sell
4. Looking to build passive rental income from portfolio, already hold 2 IPs

I am more interested to buy somewhere in NSW but my BA sees more value in Adelaide at the moment. Seeing great interest from people in Adelaide, I am ok to buy in Adelaide but the areas being looked by my BA are around 25-30 kms from Adelaide CBD such as Reynela, Sheidow Park, Christies Beach.
I was always of the thought that people living in Adelaide dont want to travel long distances to go to CBD. But after discussing with him, it seems prices around CBD have increased a lot.
So buying far from CBD will come in my budget. Can I please get some feedback on how Adelaide is doing in general and if buying in suburbs around 30kms from city makes sense for capital growth?
Thanks!

 

@D.T. will really appreciate some advise from you here, thanks!

 

I think you are correct here, and $600K is a lot to spend that far south!!

People in Adelaide love the beach, the City and the Hills. Also being within 20 minutes to those places. good luck!!

 

Hiya

I think your BA is on the right track for the most part, may i ask which one you're using?

That kinda budget used to go a very long way in Adelaide but (un)fortunately we're booming at the moment so it doesn't go as far as it used to. I'd definitely look at Sheidow Park, Hallet Cove, and Woodcroft. There's certain section of those suburbs that are better than others. You can get nice 4 bedroom houses in those areas for your budget, which in turn also attract families that stay long term and pay rents in the realm of yields you require.

Reynella is a bit cheaper suburb, a little bit lower socio economic than the above (but certainly not lowest) and is a good investment but if you have the budget you may as well get into the better areas (or perhaps 2 here?).

Christies Beach: I think it depends on what you get exactly as there's a big range of properties here from ex state housing to beach front mansions. Perhaps consider Port Noarlunga, its the next suburb down but is a little bit nicer.

Feel free to drop me a line if you're considering any specific properties and want some feedback.

 

You will not go wrong in the Southern areas,its still a great time to get in,lots going on.I work with a major builder, and the forecast/projection over the next 3 years in numbers is staggering.I just sold my holiday house in Goolwa, and i am still smilling what it sold for.

 

Which one are you with Jim? I recently had someone i know approach all of them at the Seaford display homes area, and every single one of them said sorry we got nothing left. I used to worry about a couple of the south areas because of extra supply coming online, but its all gone now so...

 

Thanks @D.T.

 

Thanks @jim1964

 

good post forum to read

 

Personally with 600K budget you actually have a lot more options than what the BA has suggested. Then again I noticed that the price at Adelaide has also moved significantly.

For that budget I would try to buy as close to city as possible, but then the issue would be rental yield being lower, so you would have holding costs. I would buy a smaller newish house as close to CBD, or at eastern suburbs (more prestigious), or suburbs close to near-city beaches (e.g Henley, Semaphore, Glenelg, Brighton) as possible. But that is just me.

 

I think many people would too, hence why it’s been at least a year since free standing houses in those suburbs listed were within 600k. Semaphore was probably last of those to leave that sub 600k mark.

 

If that were possible, I’d agree