Murray Bridge..Forget the stigma!!

[jim1964]

http://www.realestate.com.au/property-duplex+semi+detached-sa-murray+bridge-111016183

This is a property we purchased recently.I have lived in the Adelaide Hills most of my life,and have myself laughed at the prospect of investing there more than once.Over the years i have seen fellow investors take a punt,and do well!,more than once.I thought long term why not............this is the breakdown.

1)$260k buy in.

2)All fees and charges $12058k.

3) No 4 rents at $250 pw 12 month lease

4)No 6 rents at $250 pw 12 month lease

5)Council rates $900 year

6) two 3 bedroom houses on 1 title............$500 pw.Do the maths,this is close to 10% yield.Cashflow heaven.

Each home has its own water meter,own sewer point and council regulation firewall.Easy to Torrens Title,and increase each house by approx 30k shuffling a bit of paper around,with a small cost to do.Get over the "stigma"of places like Murray Bridge.Out of our portfolio of 7 properties,this by far is the standout.

 

[JWR]

Very good buying - good job.

If you haven't settled yet try and push them lower after the building and pest report/s.

I would think they'd be a little more negotiable as you've basically paid list price and there wouldn't be much/any competition. Doesn't hurt to ask.

 

[jim1964]

My thoughts exactly,get the contract in place,then go for a second bite at the cherry,see how it goes,but even without a further price reduction,still pretty happy with the outcome.
There are always full semis coming onto the market,and they go pretty quick,with the attached rents in place.its a no brainer,you cant go wrong.

 

[Brady]

Jim whats your thoughts on Murray Bridge.

Havent looked into the area too much, had a electrician work on the shopping centre when it was having work done last year (i think it was last year)

What else is going on in the town?

Growth drivers?

1.9% vacancy rate...

 

[jim1964]

looking at the "BIG" picture,4 negative growth years in a row...................due for some movement.Also,as buyers get squeezed out of most Adelaide areas and move to the outer areas,in time this will happen to the Gawlers,Mt Barkers etc looking for affordable housing.This one will be long term,5-6 years minimum.

"The Cruncher"......................"big new police station and courthouse" being built,new big W.5 years ago remember when the government wanted to sell Yatala and Magill and move it all to Mobilong? The new Police station is the start of the process,the relocation is back in the governments radar to grab cash back from where the services are now.

Rents are all really good too.

 

[Corey Batt]

Didn't even know there was a Big W up there.

I just remembered it as a one horse town.... Seems I was wrong.

 

[our obsession]

Well done Jim Co. Looking and sounding good.

 

[jim1964]

One of the fastest growing "regional" towns in SA,i think it will overtake Mt gambier shortly on that title.

 

[Corey Batt]

Without the long drive to check on your properties.

Jim, do you mainly look at regionals? Or do you go into metro also?

 

[jim1964]

Mainly regionals, the more affordable value add properties i find a greater pool of renters and buyers.Used to deal in Adelaide areas but its getting too hard and expensive too find the properties i like to buy.

 

[weg]

years ago remember when the government wanted to sell Yatala and Magill and move it all to Mobilong? The new Police station is the start of the process,the relocation is back in the governments radar to grab cash back from where the services are now.

Rents are all really good too.

The big move to Mobilong is definately off the cards. Alternate 'works' are either on, or already past the drawing board, and all are in the city that i know of.

I know a couple of people with property there but as they were purchased donkeys years ago, the rises were as a result of time and flow on effect more than anything else - like many places where there are the usual jobs.

But like you said, new industry does bring in more people but I'm not sure if there are any major projects on the cards.

Jim, isn't the biggest industry there the abattoirs/meat processing plant (don't know how big it is now)?

 

[jim1964]

"Teys" brothers are the abattoirs.They have sites in lobethal and Naracoorte as well.We have 3 ip,s in Naracoorte,and never had a down day with renting,or any dramas.Hopefully MB will be the same result.
This Government i think will use the scattergun approach to rake in cash...........i did say 5 to 6 years,but it will happen.Big W just spent bucket loads on their new store,and the racecourse is being turned into housing(sound familiar?),and a new international one being built,with a population of over 20,000 maybe the next Strath or Mt Barker.Fingers crossed.
And there is always plenty of water.............................................

 

[MsAli]

Hi Jim,

I just spoke with a less than optimistic agent in the area...He said to me the rent is more like $210 a week each, the PM fees being 11%. Can you please clarify if this agent is plain conservative?

Further he also said if you are lucky it takes about 3 weeks to find tenants, though usually it takes around 6-7 weeks to find tenants....

How has your experience been?

Thanks.

 

[DaveM]

I think they are both already tenanted by the ad?

Hi Jim,

I just spoke with a less than optimistic agent in the area...He said to me the rent is more like $210 a week each, the PM fees being 11%. Can you please clarify if this agent is plain conservative?

Further he also said if you are lucky it takes about 3 weeks to find tenants, though usually it takes around 6-7 weeks to find tenants....

How has your experience been?

Thanks.

 

[jim1964]

The agent you spoke to is pretty dear at 11%.We pay 9%,with the usual costs.tenants both pay all water and usage.Both houses are under lease with people on a waiting list,the PM has proved this to me.So i guess the experience has been "good".Dont know who you spoke to,but i can PM you who we use.I think the agent you spoke to is a bit negative.I have 2 business associates with rentals down there........ALL GOOD.

 

[MsAli]

The agent you spoke to is pretty dear at 11%.We pay 9%,with the usual costs.tenants both pay all water and usage.Both houses are under lease with people on a waiting list,the PM has proved this to me.So i guess the experience has been "good".Dont know who you spoke to,but i can PM you who we use.I think the agent you spoke to is a bit negative.I have 2 business associates with rentals down there........ALL GOOD.

Yeh he didn't know much about the rentals it seemed...I've PM'ed you

 

[jim1964]

It really is sad people selling real estate have no idea how to do a professional job.With sales being slow,you would think they would bend over backwards to pump up a sale."a Lazy Agent It Seems!!"

 

[jim1964]

The big move to Mobilong is definately off the cards. Alternate 'works' are either on, or already past the drawing board, and all are in the city that i know of.

I know a couple of people with property there but as they were purchased donkeys years ago, the rises were as a result of time and flow on effect more than anything else - like many places where there are the usual jobs.

But like you said, new industry does bring in more people but I'm not sure if there are any major projects on the cards.

Jim, isn't the biggest industry there the abattoirs/meat processing plant (don't know how big it is now)?

Advertiser 1/9/2012. Magill training center shut down and relocated to Cavan.
Start of the Governments land grab in fancy areas.Yatala will be next........
Certainly kept this quiet.

 

[weg]

Advertiser 1/9/2012. Magill training center shut down and relocated to Cavan.
Start of the Governments land grab in fancy areas.Yatala will be next........
Certainly kept this quiet.

They haven't kept it quiet. That and other similar stories get regurgitated all the time, especially at budget time, so it appears heaps of money is going into these services when it's usually the opposite.

It's been a similar story with James Nash House too. The lack of beds there is putting such a strain on other hospitals its not funny.

The thing with prisons is, they're very expensive to build, and no one wants one in their backyard. Remember it was Rann pushing for Murray Bridge - under intense pressure not to procede.

My feeling is Weatherill will avoid going down that path again like the plague.

The state is broke anyway!

News article for 2009

http://www.abc.net.au/news/2009-09-23/magill-training-centre-to-be-replaced/1440068

 

[Logica]

Hi Jim,

I just spoke with a less than optimistic agent in the area...He said to me the rent is more like $210 a week each, the PM fees being 11%. Can you please clarify if this agent is plain conservative?

Further he also said if you are lucky it takes about 3 weeks to find tenants, though usually it takes around 6-7 weeks to find tenants....

How has your experience been?

Thanks.

Quick review of comparable rentals on RP Data does seem to indicate that $210 may be the true comparable rent in the area for similar properties. But even so, the yield would still be 8.4%. Pretty good...

NB: purchase price of $260k for both seems good too as comparable properties have been selling for $145k EACH.

Cheers,