Hi all
I live in WA, am a sole parent on a single average/middle income and am thinking of investing in my first property in SA in Davoren Park. The property is around Lawson Street area. I am going through a company called Emery Group who locate a property for you, organise finance through banks etc, become your property managers through their SA real estate branch, advise to spend ~$40,000 grand on renovations with $5,000 set aside to cover mortgage during reno time. The property is currently tenanted at $220/wk and valued at around $185K for 800sqm 3×1. I have looked on near maps and found schools, adult education campus, light industrials , shops etc all close by. Am aware of DP's reputation as a dodgy area. Am aware of Playford Alive rejuvination. Anything else I should be aware of?Is this reasonable price for such a place?
Can you do decent renos for ~$40,000?
Anyone heard of reputation of Emery Group? in SA or WA?
Long term prospects for Davoren Park?
Vacancy rates still low?Help much appreciated as am novice investor.
Cheers,
WalshyI haven’t heard of the group so can’t comment. You need to find out how they are paid. Is it via an upfront payment from you? Ask them if they’re getting a commission from the lender – you want to make sure that there organising the finance that’s most suitable to you (and not their back pocket).
I think a $40k reno on a $185k property sounds too much. What sort of work are they proposing and how much added value is it forecasted to provide?
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
HI Jamie
The group gets an upfront fee from me and the lender that's given conditional approval is the ANZ and is the same package that I am on with my home loan – except 0.3 % better rate! They do get a commission from the bank which looks to be same as previous mortgage broker got.
The renos have a max budget allowed of $38,500 and itemised bills etc get forwarded to me and any balances left over go back into my account. The work is new paint, window treatments, floors, bathroom and kitchen and maybe a little landscaping – work only done if needed! They say they are adding about $40K to the value through what they do.
I won't make any final decision until I have read the property condition report and pest inspection report.
Cheers
LizHi Liz
I've lived in Adelaide since 1996 and in South Australia since 1984.
If someone in the street came up to me and asked "what is the worst suburb in Adelaide?" I would immediately say: "Davoren Park".
I wouldn't need to consider it, think about it, or reflect on it. It's "Davoren Park".I have several investment properties around Adelaide and would NEVER consider Davoren Park.
Its also a part of the outer mortgage belt. If interest rates go up and this flood levy empties peoples pockets then this WILL negatively impact on this mortgage belt.I think its fantastic your considering an investment property for your financial future but methinks this one will give you lots of trouble and stress. I'm actually dissappointed the Emergy Group would even consider such a suburb.
Just my thoughts anyway.
walshy wrote:HI JamieThe group gets an upfront fee from me and the lender that's given conditional approval is the ANZ and is the same package that I am on with my home loan – except 0.3 % better rate! They do get a commission from the bank which looks to be same as previous mortgage broker got.
The renos have a max budget allowed of $38,500 and itemised bills etc get forwarded to me and any balances left over go back into my account. The work is new paint, window treatments, floors, bathroom and kitchen and maybe a little landscaping – work only done if needed! They say they are adding about $40K to the value through what they do.
I won't make any final decision until I have read the property condition report and pest inspection report.
Cheers
LizHi Liz
Great, at least the payments are transparent – so that’s a good start.
To be honest, and this in only my opinion, $40k to renovate a $180k property within that particular area seems like overkill. We carried out similar work (not including the bathroom) for $7k recently on a house in Canberra – admittedly we carried out most of the work ourselves which would have significantly reduced labor costs.
Look at the opportunity costs of spending that $40k on renos. It could potentially be used towards another IP (or maybe even two within the same area).
I’d also ask the group if they’re getting paid anything from those carrying out the renovations.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Biggaz13
What is your opinion of the Playford Alive rejuvination project. Has it had any positive impact on the area? I used to live in a similar area in Perth. Balga was known as part of the KGB area – high crime rates, lots of housing commission tenants , dodgy looking neighbours who actually turned out to be wonderful if not a little rough round the edges. It had The New North urban renewal project happening that was way less money than Playford being spent on it. When I sold the house it had trebled in value over 8 years. Whilst I worked in the country, I rented it out and yes, the tenants weren’t the best. Had all sorts of niggly issues with them. So I am aware of all you said and appreciate your comments. It is just that my budget is limited to $270K max and I don’t have many options for buying what will essentially be a land purchase in the long term.
I also understand that Perth went through a property boom during that period and should not expect same rates of growth. Do you have anywhere else I should consider in Adelaide that would likely fit my budget.Jamie
I will question them further on exactly what demos entail.Cheers
I was vaguely aware of the Playford Alive rejuvination project.
The Land Management Corporation has made some pretty audacious claims in the past and it seems like they are making some huge claims in this project.
Yes, lots of promises but I'm not convinced.
My cousin lives in Davoren Park. Chronically unemployed. 7 kids. Can't move out because he can't get a house anywhere else. And I've heard some horror stories from them.
I just feel with a flat market. A very tight State Budget because there's no money……apparently. Big spending cuts. Flood levy. An unknown Carbon Tax. De-salination plant that will hit the state economy hard. Expect water bills to go up by about 50%. Huge increase in electricity bills starting July 1. Mortgage belt under extreme pressure.On a positive note, state unemployment is low. Potential mining boom (Roxby Downs) gives a sense of optimism (if it goes ahead. Japan presents negative press re: uranium and power plants). Population slowing increasing. Very tight rental market. Agriculture will always be strong for the state.
Personally I'm starting to look at Brisbane. Logan Central area. Looks like some decent houses for around $250,000 and renting out for $300/week or thereabouts. That way everytime you visit the Gold Coast you can claim your trip on your tax!!! Early days in my research though. Also a fairly low socio-economic area I'm reading.
Final comment. If the Davoren Park area triples in value over the next 10 years due to the Playford Rejunination Project then its egg in my face. All the best with your decision making.
Decisions, decisions. Arghh! Hate it! I don't expect Davoren Park to triple in value – double would be nice over 10 years. That's when I want to pay off my home mortgage. Who the hell knows?? Thanks for your insights – all fuel to the fire, so to speak. I know in Perth they made big statements about the New North rejuv'n proj but – it doesn't jell with what you see on the ground – so again – who knows with the Playford Alive proj???
Cheers
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