Home' API Magazine : August 2014 Contents 60
API AUGUST 2014
AUGUST 2014 API
Just to be balanced, the last con for this property is the low
yield on your investment. In Adelaide yields of up to 10 per cent
are achievable in some of the lower socio-economic areas and an
investment of $450,000 with a rental return of $375 per week is a
pretty low yield for Adelaide.
CW: This property is in need of considerable work but can be
let as is.
¿ WHAT ADDITIONAL QUESTIONS WOULD YOU ASK
DW: Since this property is attached to its neighbour, I’d like
to know if there are any joint outgoings. Although the property
is likely to be Torrens titled, it’s still best to check. Even if the
property is Torrens titled there could still be joint plumbing due
to the age of the property – check this out with SA Water with
an internal and external sewer and water plan. If the property
is heritage listed or even contributory – local heritage – I ’d like
to know, as this will affect the ability to alter and develop the
I’d be asking if they’re negotiable on price. I ’m a bit cheeky
and always like to know. The reason for selling is one question
I ask but not for the usual reason. I like to know that I’m fitting
in with their needs, as this often makes them more flexible on
price. If I’m buying for investment purposes then the terms of
the purchase aren’t as important as the price. If they need an
extended or a quicker settlement to leave the property full of
rubbish or even to take the rainwater tank I don’t care so long as
I pay the ‘right price’.
I’d like to know what the outgoings are – rates, water, levies
etc. What inclusions/exclusions are included in the sale? I’d
like to know if there are any easements on the property. Any
improvements done to the property and improvements possibly
not approved by council. My final question is always the same...
“is there anything else that I should know about this property?”
CW: Not much. Something isn’t right with pricing so this is
what the discussion would be around. If I could find the reasons
and solve the issues we could go further with our negotiations.
¿ HOW HAS THE MARKET BEEN PERFORMING IN THIS SUBURB
AND FOR THIS PROPERTY TYPE?
DW: The Adelaide market is on the rise. Norwood is a suburb
that remains strong even when the market is flat. The demand
for property is extremely high in Norwood, with 118 people
looking per property, with the average of (people looking per
property in) SA only 32.
CW: This suburb has always performed. Norwood’s median
price has gone from $250,000 in
2000 to $800,000 in 2014. That’s
a 220 per cent increase – why
wouldn’t you consider this cottage?
¿ WHAT IS THE MARKET OUTLOOK
IN THIS SUBURB AND FOR THIS
D W: Even though we can’t predict the
future, the past for this area is great for both houses and units.
The area of Norwood remains buoyant in most markets.
CW: This is a top suburb very similar to Carlton in Victoria. It’s
a cosmopolitan area on the edge of the city with a great football
club and a high street. It’s close to the city and has a diverse
mixture of property, with many older style cottages and terraces,
plus larger homes and some great modern developments.
¿ WHAT SORT OF INVESTOR WOULD THIS PROPERTY
D W: This property is definitely more suitable as a buy-and-hold
for long-term capital growth strategy, although value could be
added with a simple renovation. Upgrading the property with
lighter colours, a newer kitchen and possibly a new bathroom
will add to the desirability of the property as well as the rental
return. The condition of the property appears to be sound
enough to enjoy as is but it still has the ability to add value at
some point in the future.
CW: This isn’t for the faint hearted, but a long-term investor
who is happy to wait and then renovate or update slowly over a
period will be rewarded.
¿ AT ITS PRICE POINT/RANGE, WOULD YOU LOOK TO TALK TO
THE AGENT OR WALK AWAY? WHY?
D W: At this point I would be happy to talk to the agent further
as the positives definitely outweigh the negatives for the right
buyer. Buying for a good price is critical and this is where a
great buyers’ agent can be worth their weight in gold. In a rising
market getting the property secured is important, but being
flexible with your purchase can give you the upper hand.
CW: If I have the right investor we talk. If not we walk. The
property is currently well overpriced, it has been on the market
for a number months and it has had over 6900 hits online.
If I could buy this for around the high $300,000s to very low
$400,000s we would buy, if not we walk. There will always be
another opportunity. API
HERE’S AN UPDATE OF PROPERTIES PREVIOUSLY ANALYSED IN OPEN FOR INSPECTION
For sale Within range
At top of
æNorwood’s median price has
gone from $250,000 in 2000 to
$800,000 in 2014. That’s a 220
per cent increase – why wouldn’t
you consider this cottage?Æ
OPEN FOR INSPECTION //
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