Port Kembla

[sparky23]

If anyone is looking to invest on the East coast I am about to put 2 new houses in Port Kembla on the market, not by choice but we need the cash flow for upcoming projects. The heart says no but the head says yes!

We sub-divided a 954 sqm block so reasonable land size for each house for this day and age! The block when it was vacant can be seen on google earth under 18 Fifth Avenue which also shows the proximity to the beach and lagoon.

House 1 is a 2 storey, 4 bed, dble garage with ensuite which we built with Eagle Homes about a year and a half ago. We are looking for $460,000 and have an excellent long term tenant 3 months into their second 12 month lease paying a rent of $365 per week. When we built they did all of the gardens themselves and have a real sense of ownership and I think they will be wanting to stay around for a long time.

House 2 is just finished now and the agent is looking for $340 per week rent. It is a single storey, 4 bed, dble garage with semi ensuite. We are looking for $380,000.

Rents are net of agent fees and we have an excellent agent taking care of things for us. The houses are 8 minutes walk to Port Kembla beach and the Ocean pool and in one of the better streets with plenty of new houses and refurbs which should lift the value along with the Port expansions.

If anyone would like pics or more info please let me know.

Thanks
Sparky

 

[geoffw]

Sparky

I have a negative view of the area. You have to drive past the smoketacks to get there- that's off putting. My rellies in the area are, well, not people I would have chosen to be rellies.

What could you tell me to give a better impression of the area?

 

[skater]

I grew up in Wollongong & only moved away around 6 yrs ago. Port Kembla has always been an undesirable place to live/invest. Not only was it very dirty courtesy of BHP, but there used to be some quite dodgey areas too, although it did have a nice beach on the south side. The main street was filled with shops that looked like they had been vacant for ever.

Like I said, it's been a while since I've been there, so it may have changed. We looked at an IP there about 7yrs ago. Had a terrific yeild, around 20% from memory, but could not foresee ourselves as slum landlords.

 

[sparky23]

Hi guys

Thanks for those few kind words!

Well the whole gentrification thing is going on and my street is one of the better streets, people have been knocking down the old weatherboards and building nice brick houses and it is looking good. There is a lagoon at the bottom of the street and it is on that Southerly side near one of the nicest beaches in the area which doesn't seem to be showing any effects of the steelworks!

Also with the port expansion more people are moving into the area and clearly by the rental income I can achieve the steelworks doesn't seem to be an issue. Council have been spending money on the main street and businesses have been moving in. Also Geoff many people drive past the smoke stacks to get to many areas in the Illawarra but my houses are not underneath them! I hate my relis too but I would hate them no matter where they happened to live! There are plenty of nice people living there aswell as your relis!

My tenants have been in for 18 months and have had no problems such as a slum area might invite and I don't think slum landlords generally pick up $365 per week rent!

I am trying to attach a picture which may or may not work but it is a bit old as the tenants have since spent a lot of money putting in lovely gardens, the old house in the picture next door has been knocked down and a new house built as is also happening on the block next door to that one.

Finally as this is an investor forum look at the properties as investments.They achieve good rent and will go up in value, possibly quickly as the East Coast catches the boom!

Sparky

 

[skater]

Hi guys

Thanks for those few kind words!

Well the whole gentrification thing is going on and my street is one of the better streets, people have been knocking down the old weatherboards and building nice brick houses and it is looking good. There is a lagoon at the bottom of the street and it is on that Southerly side near one of the nicest beaches in the area which doesn't seem to be showing any effects of the steelworks!

Also with the port expansion more people are moving into the area and clearly by the rental income I can achieve the steelworks doesn't seem to be an issue. Council have been spending money on the main street and businesses have been moving in. Also Geoff many people drive past the smoke stacks to get to many areas in the Illawarra but my houses are not underneath them! I hate my relis too but I would hate them no matter where they happened to live! There are plenty of nice people living there aswell as your relis!

My tenants have been in for 18 months and have had no problems such as a slum area might invite and I don't think slum landlords generally pick up $365 per week rent!

I am trying to attach a picture which may or may not work but it is a bit old as the tenants have since spent a lot of money putting in lovely gardens, the old house in the picture next door has been knocked down and a new house built as is also happening on the block next door to that one.

Finally as this is an investor forum look at the properties as investments.They achieve good rent and will go up in value, possibly quickly as the East Coast catches the boom!

Sparky

Hi Sparky,

I did say it was some time ago that I lived there, & I never insinuated that your property was a slum, or you a slum landlord & I appologise if it sounded that way.

The beach area south is quite nice & back when I lived down that way, from memory, had fewer of the slummy properties.

BUT.... there used to be a whole lot in the Port Kembla/Cringilla area that I wouldn't lease out to a dog. You know the sort, old, in very poor condition, filthy dirty & no maintenance been done on them in donkey's years. Again, obviously not your IP as it is quite new. Who knows, the really bad ones might have all been removed now & replaced with new.

 

[sparky23]

Hi Skater

Thats ok - just thought I would clarify things a bit, there are still places like that around Cringila and some PK areas but there are some great places around too.

I live in Kiama which is mean to be a good area but over the last year one of my sons was mugged at knifepoint in town and the other chased by three yobbos after his wallet, phone etc after getting off the train, plus our car got stolen from a car park a few years back so these days I wonder whether it much matters where you live!

Sparky

 

[skater]

I know what you mean. I live in Mt Druitt. It's supposed to be a bad area, & there certainly are parts that are, but overall, it's fine.

 

[asdf]

You are going to get problems no matter where you live. I used to live in Neutral Bay which is a very affluent area of Northern Sydney but was "followed" home one late night by two thugs who was up to no good. I had to run into a separate apartment block, jump 2 fences just to get away. A month later my friend up the road got a knock on the door at 9am one Sun asking if she heard anything the previous night. Apparently some guy landed up in intensive care from a bashing just outside her t/house in the side alley - 10m from Military Rd which is a busy 3 lane road.

Have never been to Port Kembla but from what I read, South Coast is one of the regions which Syd siders are moving away from for a better lifestyle. $500k+ for a crappy old 2 bedder <100m2 which carries a $1k strata levy per quarter and still have to put up with noisy old pipes and people up at all hours. No wonder families are leaving Syd in droves....

 

[BlackSpider]

Hi Sparky, good luck with your sales.

How did you go with Eagle homes by the way?
We are Planning on building a duplex with them next year in Sydney South.
Did you experiece any unexpected costs?

Also, that double storey house looks so close to the boundary!!
Almost falling over the little house beside it. Did they mention their house seems darker inside?


Spider.

 

[sparky23]

Hi Spider

That little house was demolished and they have built a much bigger house further back on the block which is 754 sqm (block not house!)

The duplex is coming on nicely, slab about 6 weeks ago and the roof went on this week. No surprises as yet. We had a few problems with Eagle on the Port Kembla build which was mainly due to a turnover in supervisors, it seems to take ages for each new one to catch up to where the last one was at!

Plans are about to go into council for the second duplex which will be with Masterton so it will be interesting to do the comparison, the third duplex site we are hoping to pick up will fit 2 x 2 storey free standing houses which I can build to turnkey for $232,000 each 246.86 sqm each house, again at Masterton quality which should show a minimum of $300,000 equity by completion.

Which duplex are you building and what price did it come out at?

Sparky

 

[BlackSpider]

Hey Sparky,

We are doing a variation of Sunbird 2/Sunbird 5.
Being in Sutherland council, the 2nd storey can't go back past 50% of block depth. Got rough initial quotes and Masterton was a fair bit more expensive than Eagle.

With your 2 freestanding Duplexes, do they cost alot more to have them separate, rather than attatched? What size block is this one?

Where are you building all these duplexes, all down the south coast?


Regards

Spider

 

[sparky23]

Hi Black Spider

Yes all on the same estate down South.

The Masterton Duplex will come out around $65,000 more than the Eagle but there will be a difference in quality plus they will only be joined by garages. With the third the block is a duplex block but we are putting regular 2 storey houses as it is a wide block. It won't cost any more than a duplex design would cost in the same size.

Sparky

 

[bundydog]

Hi Sparky,

I have been looking for an IP around PK, Wariila area and was down there last week checking the place out. I love the beaches and there is some very nice areas, but I must admit the main street looked like a ghost town. At a quick estimate, nearly 90% of shops were boarded up and empty, and of the 10% that were leased, around half of those had for sale signs on them.
I spoke to a few locals and they said everyone shops elsewhere and the main street has been like it for years. The council are trying to spend money on strip to get people back but it looks like a long time off.
Having said that, there is shopping centres close so you don't really need the main street as such, but it was a real eye opener.
Still looking around though, the illawarra area is still sound.

 

[sparky23]

Hi Bundydog

There are some great areas down this way. Did you check out Shell Cove and Haywards Bay?

Port Kembla has the Port expansion and more businesses have moved in, Council have spent some money on the main street and is spending more. A new art shop opened on Friday and it was packed out, it may be coming on slowly but it will get there. A lot of the streets are losing the old houses and more new buildings are appearing, mine are in one of the better streets and I am able to pick up good rent, $385 and $340 per week. I didn't end up putting them on the market after all as I will regret it in a year or two if I do.

The good thing about Port is that most of those old houses are sitting on blocks that are a good size and zoned 2b, thanks to the laneways they are ideal for sub-division. You can pick something up around $250,000 and if the original house is sited properly you can subdivide and build on the back whilst picking up rent on the front or knock down the old house and build several units or townhouses. Just a case of picking the right street whilst there is so much on offer.

Sparky

 

[bundydog]

hi sparky,

Yeah, I have checked out the whole area and I am pretty excited about it all. I usually drive through on my way to Shellharbour for a surf but hadn't considered it as an investment area until recently. I have read the DCP and LEP and the councils vision seems to be pro development.
I have checked out a few cheapies around Cringila and Berkeley (I know) but the frontages were too small to subdivide. I've also scouted Warilla etc.. and even out to Oak Flats.
I think in time it will be a great investment, but the Illawarra area has to shake a very big stigma that it has, and not to mention the unemployment rate is above 8%.
My other concern is Bluescope. If you look at an area like cronulla where houses are well over 1 mill anywhere near the water, and units with views go anywhere from 500 - millions, then go 7km up the road to Kernell and a house 1 street back from the beach will only cost in the $400's.
This will relate to Cringila the most as most houses have a great view over the smelter, but wondering how far it will effect.

 

[sparky23]

Hi Bundydog

I would stay away from Cringila and I'm not keen on Berkeley, they advertise a lot of blocks that sound great value in terms of size for money but when you go and check them out they tend to be vertical! There is far more to the Illawarra than the suburbs with stigma.

Have you looked at Albion Park and Albion Park Rail, some of the blocks at the Rail can be 1200sqm - 1500sqm.

Sparky

 

[bundydog]

cheers sparky, I will check those out on the weekend, thanks