Investing in dodgy areas

Okay, here goes.  I too have purchased a few in some dodgy areas which are cash flow positive.  Namely, Davoren Park in Adelaide.  From what I hear the place is rough beyond a doubt but the area is changing with new infastructure happening and capitol growth is reasonable.  I also have one in Dubbo in NSW in an area of low socio-economic status with HC tenants but I have not had a problem with them paying their rent, as Sonya said it is paid directly by centrelink via direct debit.

As long as you have a good property manager and good insurance there should be no problems.

I bought 2 years ago a completely trashed ex-housing property in housing areas with bad reputation in Gunnedah, small rural town in Upper Hunter Valley in NSW. I'm overall happy with the purchase.

The house looked like from “tenants from hell” stories on news. Everything that can be was smashed – walls, windows, bathroom, kitchen. Plus graffiti, cockroaches, rodents, horrible smell, dark bacause windows area boarded, backyard overgrown in a spooky way and full of rubbish.  House directly across the street was just burnt down. But it was a well planned 3bd brick house on large corner lot. 

RE laughed at my offer of 80K (medium house here is 220K). But DOH accepted it. I put 50K & 3 months renovating it – new kitchen, bathroom, toilet, build-ins, polished floorboards, security screens to all windows and doors, venetians, fence, carport, garden, rubbish removal, plus travel expenses to travel here from Sydney to manage and to do work. We patched walls, painted the house inside out, got rid off “housing” varnished timber inside and painted brick outside. The house came up just great. Hard to tell it’s ex-housing! We rent it for $190-180ph. 

The only problem we have – tenants do not stay here for long & move out after 6-12 months. They say it is not a matter of a price or a house – it’s just that the area can be roughs and nosy at night, they feel safe, but want to move outside the area.  

Bando St.
Where are you?

Purchased 4 properties in Broadmeadows, Melb about 12 months ago, considered a rough and tough area. I was attracted to this area due to proximity to Melb (15K) and also the fact that many of the properties provided opportunities for development.
Currently all rented out from $270 pw to $300 pw, to date no problems with tenants, however some maintenance issues unfortunately.

In Broady I purchased 2 houses side by side for $597K and currently  plans and permits 8 unit site (cost $32,000) with Council, should be ready in August and should resell for  $960K, approximately $120K per site. The other 2 properties are 3 unit sites which I will hold to develop in future as lending criteria at present stinks, I am a lo doc person.

Also purchased in Perth, Westminister State Housing area $157K, 3 unit site 7 years ago, had 1 bad tenant otherwise all good. Value now around $475K am looking at developing this property now and should make $200K.

I like State housing area,  my criteria is get as close to capital city as possible and look for properties with potential to develop as I believe this is where the big developers eventually jump into these markets and you can just enjoy the ride even if you don't decide to develop.

I am now targetting an area in Perth which is currently with Council for rezoning, you beauty, I am going to try to get in before the herd.

Cheers

Hi My PM Is Robyn at Lakeford Real Estate.

Cheers

Sonya