Thoughts on Elizabeth SA?

Hey guys,

Just wondering what your thoughts are about investing in Elizabeth SA?

The yields at the moment appear to be quite good with some properties at 8% yield (or could be negotiated down to achieve this), and even some duplex that could yield almost 10%.

Has anyone had much experience investing in this area? Have you had any issues with tenants damaging property and not paying rent?

What are your thoughts about capital growth prospects for this area, considering that there is a new buyer for the Holden Plant that could create more jobs in the area?

Would be interested to hear your thoughts,


David

 

On the plus side

- yield


On the negative side

- housing stock quality
- soil quality
- tenant quality
- little to no capital growth unless manufactured

I haven't had a playford search in over a year, when its not much more to buy in better areas

 

Other parts of playford can be OK eg craigmore and blakeview since they actually attract owner occupiers who keep the area nice. Just isn't happening in Elizabeth.

From a budget perspective, not sure your situation, but I'd rather buy closer in than 2 out there. Or if your capacity is low, it doesn't cost much more to get into Salisbury

 

If your budget stretches there is Salisbury east/park right next to Elizabeth along main nth rd. I have had an ip in the East for 10 years and have never had any real issues with tennents, certainly no damage and has never been vacant.

 

I've been reasonable fortunate with most of these.

- yield - increased rent each year ~8% on purchase price
- house - fair for price paid
- soil quality - no different to most of Adelaide
- tenant quality - had the same tenants since I bought the place, rent paid on time.
- capital growth - limit but not surprised, easy hold with the yield

 

I've recently bought in the area. 7.3% yield, freestanding on 700sqm level block of land with good potential to subdivide in future. Priced well under the suburb median.

Tenanted right away as the vacancy rates are tight and tightening. I was able to be picky and choose good tenants (time will tell how good they turn out to be). You need to know which are the good pockets to buy in, to be able to find good tenants.

Many well priced houses to buy there but it is hard to find ones with no structural issues etc.

Don't expect magic with the CG, it is a longterm investment unless you plan on adding value right away. But if you buy at a good price, have great yields, potential to add value, can't complain too much.

Speak to @Ricky Adelaide . He is a PM in the area and is very helpful with information on different parts of the LGA.

 

Hi David
I do know at least 2 investors who held properties in this area for a number of years with zip growth and tenant issues. They both sold out of this market.

There are obviously considerations other than yield, maintenance, tenant issues etc.... and will it actually be cash flow positive??

MTR

 

True story,my sister and partner bought a duplex in the Elizabeth area,allbeit about 9 years ago, and i laughed when she told me,i thought they were nuts.They sold out around 3 years later and doubled their money,she still to this day reminds me of this.There is always 2 sides of a coin with growth.

 

Really, we need to start a thread..... "Elizabeth is Booming", or is this one already going

 

Agreed - I have a family member who is sitting very happily with when they bought 5 duplex pairs at circa 40k a side. From what I understand it's all paid off now, retirement set.

As others have noted, Elizabeth/Playford can represent strong yields albeit potentially with a lot of factors which won't give it runaway capital growth for some time. The area continues to have strong population growth but also has significant amounts of land for redevelopment which will temper prices.

Overall it comes down to your strategy and where property fits into it. If want to get a bit of exposure to property with strong yields and low entry costs - Playford/Eliz can be a good option. Otherwise if yield isn't the sole requirement I agree with DT etc and would prefer to look a little south in Salisbury where you will pay marginally more, but get a far better quality stock, tenant and CG prospects which still healthy yields.

 

I would buy Modbury > Para Hills > Salisbury > Elizabeth.

 

Ingle farm is way better than para hills!

 

Maybe in regards to location/convenience, but there are pockets of Para hills with some very large, quality built double brick homes and attractive streetscapes. As an OO my preferance would be Para hills.

 

I've already posted about Ingle Farm years ago - most know about it now and prices have moved.

Para Hills still a bit on the noise but it's well located and changing.

Modbury > Para Hills / Ingle Farm > Salisbury > Elizabeth.

That's the order that I would buy in and that's the order I believe you will see decent growth.

 

Thank you everyone for your sharing your words of wisdom.

I greatly appreciate you sharing your personal experience investing in this area, and for suggesting other suburbs I can look into further.

 

This just landed in my inbox.Your Friday Funny

 

According to this report, Elizabeth Park has been a "top performer"

and Davoren Park & Smithfield Plains are classified as "rising markets".

Adelaide property market set for significant price growth in 2018 - realestate.com.au

 

But didnt you hear, someones friends neices ex boyfriends year 10 teacher bought a house in Adelaide 25 years ago and it didnt double in a boom in 6 months so its a silly place to invest thats going nowhere

In all seriousness though, certain areas of Elizabeth have done well. Buying well and long term holds have made a lot of people a lot of money. Some who bought poorly (eg at peak of last boom cycle) then have had minimal growth since have not made any at all.

 

@James McIntyre Haha.. That's a hilarious clip... Thanks for sharing!

@tutes It's good to hear that Adelaide has more room for growth compared to Sydney and Melbourne. I guess a lot of that has to do with the income and your ability to service a loan. Like if you have $1M loan it might be harder to borrow more, whereas with $250k loan you people might be able to afford to push it up to +$300k (depending on their income).

@DaveM What if you just buy for cashflow, and have the house paid off by tenants within 25years, and not worry about the capital growth?

 

I've got 5 in Elizabeth and I love them! Even after maintenance costs, interest and PM, each one of them is putting money in my backpocket each year.