Investing in Adelaide

Hi,

I see this topic appearing in couple of threads, but I am quite a novice investor and would use every bit of advice.

I have purchased my first home two years ago and first investment property last month from Sydney. Both turned out to be good deals with a lot of luck from property frenzy in Sydney. I now sit on a considerable equity, but no cash. Sydney seems a bit out of touch for me at the moment and I am very much tempted to invest in Adelaide. I have never been to Adelaide and my only source of information is Google. I have few questions...

In Sydney, the rule is, closer to CBD or sea better the investment (considering you've purchased some time ago). I also find two bedroom units in certain locations making a good investment here. Is that the deal in Adelaide as well? I am trying to understand what would be the most meaningful investment. Something around 300K? and who would rent those properties? Seems tenants in Adelaide prefer houses to units. Is that the case? Considering my tight cash flow, I don't think I could handle vacancy much, so trying to minimise vacancy, but also make sure there is GC in mid - long term.

Thanks a lot
 
Hi April,

Given your tight cashflow situation, it might be worth looking for properties that pay all their own expenses. This way it doesnt come out of your pocket and you can hold onto a multi - property portfolio this way.

Yes, 300k can get you a unit close to city. These would mostly be rented by couples who work in the city. My suggestion to you though would be to consider the next radii outwards from the city where that same 300k would get you a house that a family would rent. Houses typically have lower vacancy rate as families with children are more difficult to relocate.
 
Thanks Dave. Looking at some stats, I see Davoren Park and Salisbury area having good rental returns. Do you think it is easy to find tenants there?

Being a full time working single mum, I am trying to acquire some investment properties without having much time and experience. What do you think of purchasing something looking at internet? Would that be too risky? I am a bit concerned regarding to cost of using a buyers agent but purchasing something in a city I have never been to is equally concerning.
 
Davoren Park would be one of the dodgier suburbs in Adl. It would be Ok if you like a bit of risk, but I wouldn't buy there. There are other options with good cash flow.
 
Hi,

I see this topic appearing in couple of threads, but I am quite a novice investor and would use every bit of advice.

I have purchased my first home two years ago and first investment property last month from Sydney. Both turned out to be good deals with a lot of luck from property frenzy in Sydney. I now sit on a considerable equity, but no cash. Sydney seems a bit out of touch for me at the moment and I am very much tempted to invest in Adelaide. I have never been to Adelaide and my only source of information is Google. I have few questions...

In Sydney, the rule is, closer to CBD or sea better the investment (considering you've purchased some time ago). I also find two bedroom units in certain locations making a good investment here. Is that the deal in Adelaide as well? I am trying to understand what would be the most meaningful investment. Something around 300K? and who would rent those properties? Seems tenants in Adelaide prefer houses to units. Is that the case? Considering my tight cash flow, I don't think I could handle vacancy much, so trying to minimise vacancy, but also make sure there is GC in mid - long term.

Thanks a lot

Welcome April..

I've explore south (reynella, christie beach, hackham surround) since last year.
Bought 2 houses, each house is 3br and have potential subdivision in the future. Bought $235 and 250k, rent for $300 and $320. Avg vacancy rate less than 1.6%, get tenant from settlement day.

If you search now, price has increased to $275ish (10% since last year).

But there is a catch, most property need reno. I did spend $7 and $10k..
 
Thanks Zachansel,

Seems those suburbs on South are pretty nice and a bit more pricey. I am new to investment/yield/CG calculation. I bought pretty good properties in Sydney and got lucky with good CG along with everyone else, but I guess I have to make better assessment on investment/return balance for future.

Looks like your properties have 6% yield. Does it cover all costs?
 
Its neutral atm.. Because my loan is 105%, I didn't include depreciation.
Yes I actually using equity from Sydney too.
So I bought brisbane 2013, and Adelaide 2014 using equity from Syd.

For me investment property like shopping list. Must have few elements (CG, CF, infrastructure, low vacancy rates, potential to manufacture equity, in the right property cycle, etc)
 
There is a lot of talk on these forums of the northern suburbs, but south is tracking along just nicely at the moment.

I prefer the North :
South has already moved up a little.
North generally has better yield
North has more to gain from infrastructure improvements and gentrification
 
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