Property Potential and Marketability - Unit 1 in 19 Kildare Avenue - Case Study Example

PART 2 by Student’s Name Course’s Name Professor’s Name University’s Name City, State Date of submission PART 2 Property potential and marketability: Legal issues: Owning, buying or selling properties is governed by the Government of Australia under the Housing and Property laws. One may not understand the laws and regulations, and for this reason, one may require a conveyancer who can assists while purchasing of selling properties. A qualified conveyancer can assist someone in looking at the heritage overlays, national planning control, permitted uses as well as the corporate body (Real Estate, 2016) Unit 1 is located in 19 Kildare Avenue Marden, Australia. Previously, the unit was occupied by a couple who were international students. Because the unit is located close to the shopping centre, close to Marden City, located in the quite suburb of Marden and close to the public transport (OBAN), the unit is in demand by international students especially couples. Marden is a Suburb in Adelaide City. This means that development plan is controlled by the Adelaide Development Plan. According to the set guidelines the minimum size of a studio are 37-meter squares, 50 meter square for one bedroom (Development Plan: Adelaide City, 2016) 75 meter square for two bedrooms and 100 square meters for three bedrooms or more. However, students’ units are usually small and no minimum size for the student units for the suburb of Norwood Payneham & St Peters. Unit 1/19 Kildare is spacious and meets the regulations of a two bedroomed house Location and Neighbourhood Issues: When selling a property, the neighborhood is very important. 19 Kildare Avenue is different from others because most of the houses in this street are flats while 19 Kildare is a two-floor building. Unit 1 is the ground floor and facing the southwest of the suburb. During the sunny days, it is heated by soon very well. Also, the unit is located close to the shopping center, close to Marden City, located in the quite suburb of Marden and close to the public transport (OBAN) which makes it suitable for university students. Some factors to be promoted in marketing campaign include: • Popular among the international students As mentioned earlier, the previous persons who occupied unit 1 was a couple who were international students. In Adelaide, there are four major universities with a population of 70,000 students. Among the population, 20,000 are international students (Study in Adelaide: Adelaide snapshot, 2016). Adelaide is one of the cheapest cities in Australia and that why international students love the city. What is more is that 19 Kildare Avenue is located near Marden city, shopping center and close to the means of transport? This is an advantage to international students who need not buy a vehicle for going to school or going to the CBD. • Laws price investment Three of the apartments that were sold in 19 Kildare Avenue were 21/51 Marden Road Marden, 4/27 Broad Street Marden and 4/207 OG Road Marden which were sold at $285,000, $315,000 and $ 250,000 respectively. Those that are on sale at 19 Broad Street are averaging between $199,750 and $219,500. The average prices therefore for 19 Kildare Avenue can be $219,000. The estimated rental income is $260 per week which is (260*52=$13,520.00) which is 6% return on investment. This is an attractive return for investors. Land, building and site features: Unit 1 is situated in 19 Kildare Avenue. The unit is a two bedroomed with one bathroom and one undercover car park. The unit was built in 1964 on a 64 square meters’ area. The unit belongs to the council area of Marden with a parent title of CT 3234/79. One advantage of the unit is its location; it is located close to the shopping center, close to Marden City, located in the quite suburb of Marden and close to the public transport (OBAN). Some of the attributes of unit 1 on 19 Kildare Avenue are: • The unit is suited for international students especially couples who are in need of a spacious apartment • The unit faces east-southwest where it receives the sun whenever the sun is out. • The unit is well fitted with tiles that are simple to clean with the minimum time. • The unit, as well as the Kildare Avenue, are covered by trees which make the environments cool and quiet to live in. Overall marketability: As noted area, Marden is a suburb of Adelaide. Adelaide is major universities such as Flinders University, University of Adelaide and University of South Australia. The population of university students is 20,000. These students may not need to own their vehicles. Therefore, they need to leave in a place they can walk to school or easier access to public means of transport. Since unit 1 is located close to the means of transport, it can be a choice for international students especially couples because it is spacious. Also, the purchase of the unit is approximate $219,000 with an annual return of around 5% which is a good choice for investors. Marketing opportunity: The possible opportunities for selling a property includes analysis of possible selling price, how it can sell through a single agent or multiple agents and another related cost such as commissions, agent fee, and other selling expenses. Appraisal of the property:(numbers for car park are wrong, also please try to find the internal area for each property) Address Months since sold Internal area (Sqm) Bedrooms Bathrooms Car park Sale price quality 21/51 Marden Road Marden, SA 5070 2 N/A 2 1 50 $ 285,000 Good 4/27 Broad Street Marden, SA 5070 3 N/A 2 1 45 $315, 000 Good 4/207 OG Road Marden, SA 5070 3 N/A 2 1 50 $ 250,000 Good 5/80 Battams Road Marden, SA 5070 5 N/A 2 N/A 50 $ 263,000 Good 2/22 Broad Street Marden, SA 5070 6 N/A 2 1 35 $192,500 Good There is no unit that was sold in building 19 but given that this units are in the some city, Marden, their prices can be compared. In addition all units have 2 bedrooms and 1 bathroom which are similar to unit 1 in 19 Kildare Avenue. The highest price was $315, 000 and the lowest $192,500. Therefore the price of unit 1 in 19 Kildare can be between $315,000-192,000, say $219,000. The rental data in Marden area was as follows: Address Months on market Internal area (Sqm) Bedrooms Bathrooms Car park Asking price quality 2/67 Stephen Terrace St Peters SA 5069 N/A 102 m2 3 1 0 $395 per week Good 10/16 Harrow Road College Park SA 5069 N/A N/A 2 1 0 $260 per week Good 10/ 6 Albert Street Payneham SA 5070 N/A N/A 2 1 0 $260 per week Good 4/62A Lewis Road Glynde SA 5070 N/A N/A 2 1 0 $300 per week Good 1/35 Gray Street Norwood SA 5067 N/A N/A 2 1 0 $240 per week Good Looking at the properties above 19 Kildare is close to all amenities such as shopping centre, CBD, public transport etc. The income per week can be approximated to be $210 per week since it does not have most of the facilities like other units such as air conditioners, heating systems, built-in robes e.t.c. Method of sale and type of agency: The 1/19 Kildare was built in 1964 meaning it is old. However, it has unique properties such as located close to the shopping centre, close to Marden City, located in the quite suburb of Marden and close to the public transport (OBAN), and is spacious for international couple students. Looking at properties that were sold in the last six months, the ones sold recently like 21/51 Marden Road Marden, SA 5070 was sold at $285,000 while 2/22 Broad Street Marden, SA 5070 sold 6 months ago was sold at $192,500 meaning that prices hike every month in Marden. Preferred method of sale: The prices hike every month and therefore the best method of sell would be auction. Auction has various advantages: When auction date is announced serious buyers come out to avoid losing the properties Since auction does not have asking price, prospect buyers will be more. The property cannot be sold below a certain price (Australian Govt, 2016) Recommendation on the type of agency to be used: Sole agency can be recommended for unit 1 in 19 Kildare. A sole agent has more attention on the buyer because he/she is bound to get the whole commission as compared to multiple agents who share commissions. The sole agency will focus on selling this unit only. Marketing and advertising: Below is a breakdown of the expenses of selling the property. Kind of expense Budget Title searches and documentations fee $400 Print media $450 Electronic media $1,000 Signage $250 Sketch of floor plan and photos $300 Sundry $200 It is therefore expected that the expenses of selling the unit will be 2600 Investment/development opportunity: Leasing opportunity: The advantage of the unit is its location; it is located close to the shopping centre, close to Marden City, located in the quite suburb of Marden and close to the public transport (OBAN). In addition it is spacious than other student units making it perfect for couple international students. The unit faces east-south west making it receive sunshine all the time. The ventilations, stares, walls and floors are well fitted and attractive. Development opportunity: The unit is built at the corner of the street meaning that there is not further development that can take place in building 19. This means that the price of the building will, not be affected by other constructions that can take place in the surrounding. Investment analysis: Address Estimated price Internal area (Sqm) Description Rent Quality GIM 10/16 Harrow Road College Park SA 5069 $290,000.00 N/A 2 bedroom, 1 bathroom, no car park $260 per week Good 21.45 10/ 6 Albert Street Payneham SA 5070 $250,600.00 N/A 2 bedroom, 1 bathroom, no car park $260 per week Good 18.54 4/62A Lewis Road Glynde SA 5070 $200,000.00 N/A 2 bedroom, 1 bathroom, no car park $300 per week Good 12.82 1/35 Gray Street Norwood SA 5067 $280,000 N/A 2 bedroom, 1 bathroom, no car park $240 per week Good 22.44 1/19 Kildare Avenue $219,000 N/A 2 bedroom, 1 bathroom, no car park $260 per week Good 20.05 Estimated values of the properties are from http://www.realestate.com.au/property To know whether the business of a certain property is viable, the gross income multiplier is used; dividing annual return by purchase price. If the GIM is higher, it means that the price of purchase is high and annual return or vice versa. However if the GIM is low, it means either price is not too high or annual return is high which is an attraction to the investors. Since unit 1 has less GIM than most of the houses on sale, it can be the best option for investors. Conclusion After analysis of unit 1 in 19 Kildare Avenue, the unit is located close to the shopping centre, close to Marden City, located in the quite suburb of Marden and close to the public transport (OBAN). In addition it is spacious than other student units making it perfect for couple international students. The unit is floor is made using tiles which are easy to clean. It has trees and located in an area that also has trees making the area quiet and serene. Given other apartments with the same specifications; 2 bedrooms, 1 bedroom and no area for car parking, the price of the unit is approximated to be $219,000 and weekly rent of $260. The GIM of the unit is hence roughly 20 which is less than other units around the area. There is a growing demand of apartments by the number of international students that is increasing every year. An added advantage to unit 1 is that it is spacious than other students apartment in the areas making it likeable by couple students. Reference: Australian Government 2016, Housing and Property, viewed 06 November 2016, < http://www.australia.gov.au/information-and-services/family-and-community/housing-and-property>. Development Plan: Adelaide (City), viewed on 6 November 2016, http://www.dpti.sa.gov.au/__data/assets/pdf_file/0008/178253/Adelaide_Council_Development_Plan.pdf Real-estate 2016, Sold, viewed 6 September 2016, . Selling Houses: The different ways to sell a house, viewed on 6 November 2016, www.ljhooker.com.au/tips-for-first-time-sellers/quick-guide-to-selling methods#YVe8PTcoeWxDddaI.99 Study in Adelaide: Adelaide snapshot, viewed on 6 November 2016, http://studentcities.com.au/study-adelaide/ Read More