Units in Blue Chip Adelaide?

Hi PC,

First time buyer looking to make a purchase soon.
What are the opinions on purchasing units in blue chip suburbs? as my budget could only afford so.
I am looking to hold long term, if average rents were okay in the area the purchase could fetch a decent yield... Not sure also if the land size will affect any holding costs?

Anyway, I haven't the faintest idea of value add when purchasing a unit in a decent suburb and would appreciate any insight.

Best

 

Units in Adelaide, it's a no from me.

What's your budget?

 

There are a lot of things that need to be taken into consideration when purchasing an investment (price point, strategy, personal circumstances) - blue chip locations are tend to be a good place to invest as you'll always have constant tenant demand, however strata costs associated with units can blowout at times due to special levies. Are you a hands on investor or are you after a set & forget strategy?
Cheers Josh

 

$450,000 - 500,000 ...

Looking to be more hands on. Personal circumstance would appreciate an investment will provide a consistent income stream, the tenant demand does sound attractive.

Would be a good idea to look into how units are treated differently in these areas. Thanks for your insight. Capital growth wise do you have any opinion?

Best

 

Units don't really do as well as houses do here - its a bit different to the bigger cities because

1) rents are so affordable here
2) and city commuting is so much simpler here

... so may as well just rent a house from a tenants point of view.

In saying that, looking at the closer in areas is definitely the better idea - Kent Town should be okay, or any on the inner south side close to the city.

Mile End I wouldnt due to age of most of them there and the flight path.
Bowden i wouldn't due to the big oversupply.

 

Traditionally freestanding homes tend to provide better levels of capital growth & you have the ability to manufacture some additional equity (through a renovation, granny flat addition). At the $500,000 price point there are other options available in Melbourne also that you can more closely manage I would assume - however these will be in locations further away from the CBD.

 

$450-500k... do some more research, plently of good buying at that level (houses)

 

Hey DT

Would love to get your thoughts on this entire block of units in Alberton

18 Glebe Street, Alberton, SA 5014

Seems quite cheap for 4 units, they are admitedly quite crappy, but from a yield point of view it seems quite good. Not to mention the obvious benefits of owning the entire group/land.

Thanks

 

If you really are interested in something, don't post it on here. Because someone else might read the post and decide to enquire on it....
Of course, if you are the vendor, that a different story.

 

Yeah, could be alright. Might need a freshen up to attract decent tenants. Walking distance to train station too.

 

Looks into financing, might take a bit of work to get it as residential.
Some banks will want it done as commercial.

 

Yes I was told the issue is more than 2 units on one title means most likely treated as a commercial loan

 

I would suggest they all have separate strata titles.
Would be owning > certain % of the block.

 

Net yield does not look very attracting. For all the hassle to get finance, the risk and headache with multiple leases, I would want a much higher net yield for a block of units. Last but not least, I do not think CG potential is any good. Just my 2c.

 

Don’t steal my property

 

You should never buy a property based on a price point. You should purchase using factors that you believe will cause an area to be in demand both for growth and yield and a type of dwelling that has acceptable demand for the area. If the price point for all of that is outside your range, don't change the type of property to make it fit - you will just be left with an under performing asset. Move on to another area and start again.

I actually own a couple of "housette" units in Adelaide managed by @D.T. however these are part of a longer term cash flow play for me. It's a block of three and I plan on picking up the 3rd property at some point. There are reasonable options out there in this regard but best to talk to the people on the ground like DT and @DaveM

- Andrew

 

It’s not just on price, this property has quite a bit going for it....development potential, possibly being cash flow positive from day one and the potential to add a lot of value with some minor cosmetic Renos....plus with the character houses in Alberton I believe the area is ripe for capital growth, just needs a little more love and gentrification.

If the port continues to improve it’ll benefit from that too!

I’m sure can’t disagree with anything I’ve said?

 

Sorry, I was just going off this line which rang a large bell, "What are the opinions on purchasing units in blue chip suburbs? as my budget could only afford so."

All those things you've listed are valid, but probably achievable in plenty of houses too.

- Andrew

 

I understand Andrew's line about finding something to fit your goals, but purely from a monetary perspective if you have $600K you could buy a block of units, or a standalone house in a nice suburb. The latter is going to rent for literally half of the former.

Everyone's circumstances are different - some do or don't have the money to be able to funnel into a negative investment. Standalone house in nice suburb likely get better capital growth, nicer tenant selection, but less options for things you could do with it in future.

 

What did this block sell for any one know>