Properties in SA for <$400k

[Bentley]

There were a lot of people at the auction but I made the opening bid of $500,000 and no one else followed so the REA bidded on behalf of the vendor at $590,000. This was beyond my limit so I didn't make a higher bid as it was still at $25k increments at the time so the property was passed in.

As this was my first auction I was a little confused as to why I was the only one bidding even though there were a couple of other registered bidders out there?

I was later called in by the REA who told me that the vendor's reserved price was $630,000. I made my final offer of $550,000 and left it there. This was yesterday afternoon but I haven't heard back from the REA at all?

Can anyone give some insight as to what your next step would be from here if you were in my situation at the moment?

$630K for that place is too high IMO. Also considering that you were the only bidder. You should move on to your next property shortlisted.

If the property is still in the market in end Jan/early Feb, make another offer if you still want the place. Or the agent might contact you again and offer you a price slightly less than $630K. Depends on how desperate the owners are to sell. Is the place owner occupied or tenanted?

 

[Jaggannath]

There were a lot of people at the auction but I made the opening bid of $500,000 and no one else followed so the REA bidded on behalf of the vendor at $590,000. This was beyond my limit so I didn't make a higher bid as it was still at $25k increments at the time so the property was passed in.
...
I was later called in by the REA who told me that the vendor's reserved price was $630,000. I made my final offer of $550,000 and left it there. This was yesterday afternoon but I haven't heard back from the REA at all?

Can anyone give some insight as to what your next step would be from here if you were in my situation at the moment?

Next step would be to find another property to suits your strategy

This. Good work on sticking to your guns, and if you calculated $550k is it's value move on.

$630K for that place is too high IMO.

Absolutely, nearly $100k too high IMO

 

[Corey Batt]

This. Good work on sticking to your guns, and if you calculated $550k is it's value move on.


Absolutely, nearly $100k too high IMO

Agreed. I ran a residex valuation on this report, it conveniently comes back at 540k, quite close to the mark that most on here have valued it. The reports aren't always accurate, but can provide some strong data to compare.

DT has hit it right, the key to finding exceptional deals is to move on from the dogs and keep on hunting.

 

[leytk004]

$630K for that place is too high IMO. Also considering that you were the only bidder. You should move on to your next property shortlisted.

If the property is still in the market in end Jan/early Feb, make another offer if you still want the place. Or the agent might contact you again and offer you a price slightly less than $630K. Depends on how desperate the owners are to sell. Is the place owner occupied or tenanted?

The place is tenanted at $515 pw with very good tenants who have expressed that they would like to stay. However, I'm sticking to $550k as paying above $600k is too much IMO and doesn't leave much room for growth + more risks associated.

 

[D.T.]

So you've escalated well above your original search bracket? At 550 there's better areas to be in. Richmond is west - Try similar distances from city in the other 3 compass directions.

 

[leytk004]

Agreed. I ran a residex valuation on this report, it conveniently comes back at 540k, quite close to the mark that most on here have valued it. The reports aren't always accurate, but can provide some strong data to compare.

DT has hit it right, the key to finding exceptional deals is to move on from the dogs and keep on hunting.

These residex Valuation reports sound handy! Can anyone get access to them or does it have to go through you?

 

[leytk004]

So you've escalated well above your original search bracket? At 550 there's better areas to be in. Richmond is west - Try similar distances from city in the other 3 compass directions.

Yes, only because there was a possibility of increasing the rent to $550 as of January next year with same good tenants. So I figured if I buy it at $550k then that would suit me just right.

I will start my hunt in the other compass directions this week.

 

[Joeyv]

I think you should do more research before just buying something for the sake of buying

 

[Bentley]

If your budget is now $550k as opposed to the $400k in the thread title, you have a whole new world of options. There are houses in the CBD/North Adelaide for that price.

 

[johnpendles]

I think you should do more research before just buying something for the sake of buying

+1

spend 3-6 months going to inspections and auctions and really getting to know the market. you might miss an opportunity or two, but imo you'll be much better informed for when you do decide to proceed with a purchase.

 

[leytk004]

+1

spend 3-6 months going to inspections and auctions and really getting to know the market. you might miss an opportunity or two, but imo you'll be much better informed for when you do decide to proceed with a purchase.

Cheers for the tips guys. I'll be making time to go to auctions and inspections every weekend after work

 

[leytk004]

If your budget is now $550k as opposed to the $400k in the thread title, you have a whole new world of options. There are houses in the CBD/North Adelaide for that price.

Properties at $450k or below would be most ideal however if the rental yield is fairly high, the house is sitting on a large block of land with room for development in the future, AND doesn't require any further renovations in order to have it tenanted immediately then I wouldn't mind paying up to $550k for it (once I've compared it to other properties in the area of course to ensure that I'm not paying too much for it).

This house in Richmond ticked all of these boxes which is why I was willing to go over my budget by a bit more. If there are houses like these in the CBD/North Adelaide then these areas are definitely where I'll be looking into this week!

 

[D.T.]

Not sure if you mentioned it earlier in the thread, but what are you actually hoping to achieve from property? I mean, from property in general, not just from this proposed purchase.

Eg are you looking to retire on rents, and if so in what kinda time frame, or some other chosen goal? Otherwise it comes across as fairly aimless, just saying well this property has x, y, z attributes so i want it. The price bracket you're looking at seems to be fairly arbitrary - why not 200k or 2M or xyz?

Edit - related question. Have you been to see a mortgage broker about how much you can borrow and how many you can buy given your current circumstances? ie, don't want you to be stuck with 1 and not be able to move from there because 500k used up too much of your capacity or because you chose the wrong loan or wrong product needed to move forward.

 

[Bentley]

If there are houses like these in the CBD/North Adelaide then these areas are definitely where I'll be looking into this week!

There might be properties in the CBD/North Adelaide for that price, but you can be sure they aren't as big or have that massive land. Else the asking price would be close to $1mil

 

[D.T.]

There might be properties in the CBD/North Adelaide for that price, but you can be sure they aren't as big or have that massive land. Else the asking price would be close to $1mil

Hmm but I thought you were a first home buyer - wasn't it you who was inquiring about Affordability Scheme?

 

[Bentley]

Hmm but I thought you were a first home buyer - wasn't it you who was inquiring about Affordability Scheme?

Yeah I was enquiring about the affordable housing scheme. My current PPOR isn't under my name.

 

[leytk004]

Not sure if you mentioned it earlier in the thread, but what are you actually hoping to achieve from property? I mean, from property in general, not just from this proposed purchase.

Eg are you looking to retire on rents, and if so in what kinda time frame, or some other chosen goal? Otherwise it comes across as fairly aimless, just saying well this property has x, y, z attributes so i want it. The price bracket you're looking at seems to be fairly arbitrary - why not 200k or 2M or xyz?

Edit - related question. Have you been to see a mortgage broker about how much you can borrow and how many you can buy given your current circumstances? ie, don't want you to be stuck with 1 and not be able to move from there because 500k used up too much of your capacity or because you chose the wrong loan or wrong product needed to move forward.

Hi again D.T., I am looking to retire in about 20 years time with at least 4-5 properties owned outright so that I can live comfortably on rents if I wanted to.

I have seen a mortgage broker and found out that I am able to borrow up to $600k given my current circumstances. I certainly don't want to use up all of my capacity and be stuck with one property unless I believe it's one where I see has potential for development later in the future and likely to grow in value in the long term (approximately equal to or more than 2 average properties). My plan is to buy and hold.

 

[Les U]

SA Cash Flow Property With Instant Equity

Check out this SA property. It is a dual income property on a golf course estate, cash flow positive and has potential for instant equity by getting a separate title.