Hi guys,
Just bought Steve’s book this afternoon, really looking forward to getting started. I live in Adelaide, SA and grew up in a satellite city of Adelaide called Elizabeth (same place Cold Chisel came from).Anyway, I wondered if anyone here had investigated Elizabeth as a good thing? There are loads of ex housing trust solid brick semi-detached places on big blocks, all built in the 50s and 60s, that sell for around $110,000. It seems the current rents are in the $120 to $150 p.w. range, which delivers 6-7% return.
Elizabeth is home to Holden’s vehicle manufacturing plant, which has recently moved from 2 to 3 shifts, creating thousands of jobs in the process. There are numerous other large industrial employers and a big new hospital in the area, so plenty of “bluecollar” prospective tenants.
I know that 6-7% return is borderline for positive cashflow, but in Adelaide our boom is just topping out now, so rental rates haven’t yet adjusted upward to match property values.
In fact, are there any areas currently delivering on the 11 second solution? Help!
I know Elizebeth very well, but never invested there , Westan has tho he did well with CP but said the tenants were pretty rough.
Regards Bear
Hi Bear and nchattaway
as bear said i bought there in 1997 sadly only bought 4 the most i paid was 24k for a semidetached (i did buy undervalue because in bought straight from the Govt, now they auction), So nchattaway can there be any more capital growth in Elizabeth? It has had an incredible run. As far as the cash flow it will not be cash positive now. You will have to hope it appreciates to make $$$.
As you are aware the tennants in elizabeth aren’t the best. i had a lot of landlord claims usually just for loss of rent (can’t remember tenants trashing the house). Its really important to get a good property manager there. I’ve had some great ones but they have often quit and gone on the new things, but i’ve had some bad ones too.
You make the comment about Elizabeth is where cold chiserl comes from. Years ago they asked Jimmy barnes was he going to visit Elizabeth he responded “why its a dump”. I’m told this prompted the Govt to fix up the area. That’s why the north elizabeth “rosewood estate” got fixed up (so i’ve been told anyway).all the best
westanI find +ve cashflow deals in New Zealand which I sell to other investors. To be on my database send an e-mail to [email protected]
Thanks bear and Westan,
You’ve pretty much nailed Elizabeth! Rosewood estate was the first and so far only suburban renewal project to happen there, and I had also heard it was sparked by Jimmy Barnes’ callous dismissal of his childhood stomping grounds.
Interesting that you were buying semis for $24k in 97, that would have been at least $15k under the market rate back then!
Even though I will be sticking to cf+ investments, I am loathe to discount Elizabeth. Surely with perseverance and some creative negotiating it can still be done?
The problem I envision as a new investor living in SA is the total lack of large regional cities outside greater Adelaide. The only towns of any significant population are all along the southeast coast or Murray River and as such are all sought after holiday destinations (with correspondingly high prices) Even the old “SA secret” of the sleepy agricultural Yorke Peninsula towns has been discovered by cashed up baby boomers looking for lifestyle holiday homes.
We have no Ballarat equivalent in SA, and we don’t have the option of wraps to kickstart our investment funds into the range needed to invest in Adelaide. Can anyone tell me if Lease Options are legal in SA? Perhaps this is my best way forward. Or can I wrap interstate properties if I am a resident of SA?
Cheers,
NateHi nchattaway and welcome[
]. It’s Diane Schmidtke and I assume there’s only one of you in SA and that I’m not embarrassing myself?? 20+ years older than you and we are only just learning this stuff and just got our first IP (in Sa) – so you are already in front and I expect to read great reports from you on here soon.
If you want to talk phone Adam and he can let you know where we are now. Have fun and wishing you great success, Diane and Tonyhey Diane any realation to Ray Schmidtke?
Regards Bear
Hi nate
Yes those properties were well under market value, 2 in Smithfield Plains for 21 each. its hard to imagine you could buy in a capital city for that price only 6 1/2 yrs ago.
westan
I find +ve cashflow deals in New Zealand which I sell to other investors. To be on my database send an e-mail to [email protected]
hehehehehe, Westan thats an example of what i mean about local knowledge putting us out.LOL, even 3 years ago i was saying keep away from smithfeild plains, very very rough area, but Deveron park is worse but is now pulling in better prices that commision houses in elizebeth vale (15 minutes closer to the city). I have no idea why. Maybe coz the name doesnt have elizebeth in it any more……..LOL
I remember having a few beers with some of my real estate agent mates about 3 years ago and laughing about people paying 45-50k for houses in those areas, now they paying more like 120k, go figure………LOL
I would be worried about my house being pulled apart from the inside out ………..LOL
Regards Bear
Hi Bear,
not as far as I know.
cheers, dianeWe have no Ballarat equivalent in SA, and we don’t have the option of wraps to kickstart our investment funds into the range needed to invest in Adelaide. Can anyone tell me if Lease Options are legal in SA? Perhaps this is my best way forward. Or can I wrap interstate properties if I am a resident of SA?
Cheers,
Nate
PS Hi Diane!Nate
Yes Lease Options are fine in SA, and as far as I’m aware you can wrap interstate properties.
Cheers
Mel
]. It’s Diane Schmidtke and I assume there’s only one of you in SA and that I’m not embarrassing myself?? 20+ years older than you and we are only just learning this stuff and just got our first IP (in Sa) – so you are already in front and I expect to read great reports from you on here soon.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
