Mawson Lakes (Adelaide)

[hobo-jo]

I'm seeing quite a few apartments in the Mawson Lakes area that have implied gross yields around 6.5-7.5%.

Seems to be everything you need nearby for shopping.

20 minutes into the city by train.

Uni campus and schools.

Looks like rents & prices have gone nowhere for around 5 years (and perhaps might be stagnant for sometime yet given new development still going on).

Any SA investors hold a property in Mawson Lakes? What's your experience been with finding a tenant, strata costs and any other pitfalls I might be missing?

 

[eKwatee]

I'm seeing quite a few apartments in the Mawson Lakes area that have implied gross yields around 6.5-7.5%.

Seems to be everything you need nearby for shopping.

20 minutes into the city by train.

Uni campus and schools.

Looks like rents & prices have gone nowhere for around 5 years (and perhaps might be stagnant for sometime yet given new development still going on).

Any SA investors hold a property in Mawson Lakes? What's your experience been with finding a tenant, strata costs and any other pitfalls I might be missing?

I own a few in there + have sold many there over the past 5 years. 'Touchwood' I've had almost nil vacancy, have always found a tenant to overlap the exiting tenant. I've also got one tenant that has been there for over 4 years and doesn't look like she will move out anytime soon.

I slightly disagree with you, in that prices haven't gone anywhere for almost 5 years, it really depends which buildings you bought in too. Some have outperformed others. I've sold some that have had around a 30% increase which were purchased for around the $190k +/- 5 years ago.

Strata Fees: When I first bought in, they seemed relatively cheap, however over the 6 or 7 years that I have owned mine, I've experienced 2 noticeable increases to the rates over this time frame. The first was a sharp increase in the Corporation insurance when Queensland was hit with the flood and the other was after the Carbon Tax, as the lighting of the car-parks and the common electricity can be quite high. On average they are currently around $600 per quarter for the apartments I own.

Briefly on the location, theses apartments are in a brilliant position. Uni-SA, train, shops and Tech Park always attract the tenants.

There isn't too many apartment allotments left to be built out now, the '1st Home Buyers, New Construction' grant is slightly hindering the prices for the established apartments, however like I said, not allot of new ones left to go. Prices should slightly rise once these remaining apartments are completed.

 

[Corey Batt]

Huge churn generally for tenants, very transient population.

There has been a consistent problem for years of prices being suppressed and crashed by new developments coming online, however with most of the area reaching full completion that will taper off *eventually*.

Once of my first gigs whilst in uni was doing inspections for over a hundred apartments in Mawson Lakes across the various developments. A lot of students, immigrants etc. I did see my share of damaged kitchens and even one was running a gas cooker on a tripod in the middle of the carpeted lounge!

As always, avoid blocks which have onsite gyms, pools, elevators.

Not my cup of tea at all.

 

[hobo-jo]

Thanks for the feedback guys.

$600pq seems quite high, does that include water?

 

[eKwatee]

Thanks for the feedback guys.

$600pq seems quite high, does that include water?

I think $600 p.q. would be about the norm in Mawson Lakes, maybe even a little on the lower end.

does that include water?

Depends on how the individual Corporation is set up, some do include the water, some don't. I have one apartment that has shared gas and water and that has a Strata fee of around $600 p.q. Don't forget this does include a sinking fund contribution for future works.

Some of the apartment complexes that have multiple lifts, will have Strata fees as high as $1100 p.q. I know of one building that has 4 lifts servicing the building, last time I sold one in that building, I recall the Strata was extremely high.

 

[D.T.]

Supply is too high for me, and im not a liker of strata fees.

Itd make a decent place to rent though, lots of choice, competitive prices, etc. Not the side of the table id want to be sitting as an investor.

 

[Xenia IM]

In the early days when apartments were being built we were offering free gym membership for new tenants to ensure ours were competitive with 50 identical ones on the market at the same time.

Now is not a problem - less than a week vacancy in most cases.

My experience is that sales are a bit slower in the area - especially for apartments - due to a lot of competition from similar properties.

 

[cedben]

Mawson Lakes

I am interested in peoples views comments on my situation.

I have a daughter who will be attending uni at Mawson Lakes next year.

Her partner will be moving to Adelaide to live with her and will be contributing half of expenses.

We will be covering our daughters rent.

I need to make a decision on whether we

rent an apartment or house for them;

buy an apartment for them;

buy a house for them within commuting distance. Will need to have good access to public transport to shops and uni.

Looking for apartments with 2bed and 2 bathroom or house with 3bed and 2 bathroom.

Had a quick look at some pricing last night and on very basic numbers looks like rental returns would nearly cover costs.

We would be happy to keep a property as a long term investment as my plan is to buy one or two investment properties next year anyway.

Will be in a position to buy after end of August 2015, but if buying would holding of until December/January be better as would probably not want house empty for to long.

Any comments / advice appreciated.

 

[DaveM]

To be honest, just rent. Buying your child an apartment for uni is generally a big no no. Buy where the returns and future growth make sense.

 

[Corey Batt]

To be honest, just rent. Buying your child an apartment for uni is generally a big no no. Buy where the returns and future growth make sense.

Agree with this.

If you were intent on making a purchase for them to rent, I'd sooner be looking at 2 bedroom units within the inner ring in small groups of 3-4 (not as handy if she's going to Mawson Lakes campus though). Similar prices, slightly higher rents without the major oversupply and long term spiraling strata.

Otherwise for the same money you can buy a freestanding house on a decent block, higher rent and no strata fees.

 

[cedben]

Thanks, Corey
I am more interested in house and land. Any suggestions where would be the best area to start looking.

 

[Corey Batt]

Thanks, Corey
I am more interested in house and land. Any suggestions where would be the best area to start looking.

You can purchase a 80-90's 3 bedder in the 5108 postcode for the low 2's easily - the general rule of thumb is that Paralowie is the 'nicer' section of the Salisbury area, Salisbury North the worst. Rent wise you'd be hitting 280-300wk depending on the quality of the property.

That's around a 5-10 minute from Mawson Lakes, depending on what section you buy.

 

[ADLInvestor]

We own an IP in Pooraka, in Montague Estate, which is about a 10 minute walk to the UniSA campus at Mawson Lakes. Nice area, 3 bed 2 bath which cost mid 300's. Literally across the other side of Main North Road.