Hi Steve.

I just came across your question as we have offered on a property in Port Lincoln on large land, etc.
My partner has family over there so I have been watching the area off and on over the last 20+ years.
My feeling is that there is currently a sense of vitality in the town, with Coles and Woolworths doing
big expansions.  The hospital has also been granted funds for a big upgrade. Previously the town was
known as having a very high income per capita, due to the fishing industry, but now seems to be
gaining from the good times farmers are recently experiencing.  There is also the flow-on from
mining exploration further north, which is helping local businesses and employment, although Port
Lincoln seems keen to avoid any pollution from mining in the town.

My opinion is that Port Lincoln has been more expensive in relation to Adelaide prices than it is now.
It seems as though outlying smaller towns such as Tumby Bay have had massive price growth but Port
Lincoln hasn't kept up (it was relatively higher, so they have definately caught up).  I think there is room for
future growth there as things have been flat and then falling for the last 12 months. The population is
slowly growing.

Personally I like the Kirton Point area, as opposed to the northern traditionally pricier section of the town
and the southern ritzy marina.  Kirton Point is elevated, with lovely sea views everywhere, is heading toward
the marina and has enormous blocks that can be subdivided.  Property managers told me there is a 0.5
rental vacancy, and realestate.com statistics mention a 4:1 ratio of people looking per ad.

Although it is a bit remote for supervising, it has the benefit of being a beautiful sea-side location where people
would enjoy living. We are looking at it as a long term, buy/hold then subdivide strategy.

Good luck,
G

Hi.

I could talk to the duty planning officer at the relevant council, to double-check that the size of block can fit the two units/homettes on it.  A large surveying company can be useful, as they tend to know the council rules, plus can advise about sewerage connections/levels etc. which can be an issue on some sites.  Also determine the council's rules relating to open space and its size, e.g. where we have done something similar a couple of times, we need a 5 x 5 m free and clear area (this is a new rule, so they do change.  First time it was 25 squ.m for each bedroom).  The width of the block/the shape of the block can be a deciding factor in relation to what you can build, and whether it is possible to have the parking needs fulfilled.

Take your time, there are lots of opportunities like this.  Good luck,
G

Hi Lesia,

I think you will definately need a sense of humor and perspective, as things are bound to go wrong.  Its human nature that some tradespeople will go off the rails when you are not around – they do that to you when you are right there in the same city.  I think regular trips down, and possibly bonus payments for work completed to date could be very important!

G

Hi Koiking.

It might be possible to buy just enough land from your neighbour, at a reasonable cost to you, by having the boundaries
realigned.  Basically you would be buying some of the adjacent property, while both of you retain your titles.  I'd enquire
with the local council before contacting the owners directly.

Regards,

G

Hi.

I am sorry to hear about your situation, as you are obviously trying to be really sensible by offsetting costs with boarders,
but I know this can be a nightmare in reality!  Well done though in having started so well as an independent young woman.

Here are some options that sprang to mind:

1.  Terminate boarders and start again with new ones. 

2.  Rent out your room as well, and move back home/in with relative or friend for a while so you can gather your thoughts.

3.  Reassess your approach by taking a long term view.  Could you save all the money  from boarders as a deposit for another property just for you to live in, i.e. small flat?  Would this goal motivate you to tolerate things as they are for a couple more years?

4.  Would a compromise of one boarder only work?

5.  Is it possible that your property has gone up in value enough for you to sell and regain a deposit for another home?
My reason for asking is that you may be able to find another property that has a granny flat.  This could enable you
to repeat the process, whilst having more independence living in the flat.  Sometimes granny flat homes are around
the same price as ones without.  Alternatively could you move a secondhand one into your current backyard, with council approval, and rent your former room to cover the cost, again so you are not in the house?!

I personally think moving out and renting at this stage would put more strain on yourself with shortfall in the mortgage to
pay as well as rent.  This would obviously slow you down in your investment plans too.

Good luck, I hope you can work something out.

G

Re. the superannuation contributions,

It is essential to bear in mind what $745,000 will be worth in 15 years – not what it is worth now obviously.
For example, looking back to 1995, you could buy my previous house in Mount Hurtle, Woodcroft, Adelaide for
about $130,000, but now it is worth around $450,000.  Hence the spending power of $750,000 wouldn't
be the answer for your retirement, in my opinion.

Regards,
G

Tips –

1..  It the goal is to BE rich, you can't afford to be focusing on LOOKING rich.

2..  Treat tenants as YOU would like to be treated.

3..  Buy in areas that have more than one type of appeal – e.g. beach-side living, retirement destination.

4..  Build/buy properties that target smaller families – its the future.

5..  Its the land that ultimately has the value, so buy well located or larger blocks.

6.. Our best buys come from watching what hasn't sold, and making a lower offer before the price is reduced.

7..  Be willing to add value.  This can give 'instant' equity, or your deposit, so you can go on to buy more.

8..  Look for areas that seem too cheap compared to nearby locations – they probably are!

9..  Ring local property managers before buying.  They are a mine of information and generally helpful.

10. Don't discuss property with family or others who are not investing.  Find people who are already doing it.

Hi there.

Dwolfe has given you some good tips.  I will try to add a little from my own investigations (we've all looked into this type of investment!).  Basically as mentioned, they are managed by an organisation (hotel group, retirement village, university accommodation company, etc. etc.) and they take their profit before you get paid.  This is probably fine when all goes well, but I have found some that haven't been doing so well due to the GFC, specifically holiday units.  There is nothing much you can do when you own one, but sell.  You can't renovate or control the rent as with other property.

That leads to the issue of who will buy.  It is always better to have something that will attract a range of buyers, e.g. different types of people who might want to live there, invest, etc.  These types of things attract investors so you are locked out of a lot of the buying market. Then there is the size.  They can be quite small.  This and the fact they are usually classed as a commercial type property in the eyes of the bank means they require a bigger deposit from you. 

One particular investment we looked into comes to mind, Unihouse, in Adelaide.  About ten years ago they were selling for $114-$130 and they are only attracting about $50,000 more now.  Not a good result compared to other properties.

Having said all this I know some people buy them because of their cash flow.

Good luck researching,

G

Hi Andrew.

In answer to your question about any up side to interest rate rises, my understanding is that any foreclosures that
result from mortgage stress will mean more people renting.  Also more people tend to hold off buying when rates
are higher (creating that pent up demand you hear about when the government introduces help for first home buyers).
Again, they are more likely to rent, so that's upward pressure on rents. None of these things are a certainty though.

As to when to put up rents, I tend to think most people hope for good long term tenants, and in those cases rises
are usually annual and not huge i.e. in line with inflation.  Otherwise its probably easiest to do it when your tenant moves
out. 

All the best,

G

Hi there fellow Adelaidian?

I've actually found agents frequently post property on realestate.com.au before they are in the paper.  A quick
morning search is needed there as well as the time to dash down there a.s.a.p. Otherwise I know the individual agencies will send you weekly emails as well as notifying when individual new properties are listed.  For maximum effectiveness I think you need to contact the agents in the area where you are looking and ask them what they have coming up, and to specifically notify you if something comes up.  I have found they rarely do this however.  I don't think there is a shortcut around this unfortunately unless its a sellers' market and the agents are really having to work to find buyers!  In the one area where we own several houses the agency we once bought from and also property manages one house is very good to us as I assume they see us as a future source of sales and rent.

G 

G