Counting the dollars

We just settled the $460,000 sale of a 2 bedroom apartment in the South Building of our development at 4-8 Charles Street Adelaide (aka 223 North Terrace). This apartment was originally bought off the plan for $305,000 in October 2006 and we managed the rental since that date for the owner.

As it quite conveniently turned out that it was both bought and sold in the month of October, we thought we would "run the slide rule" over his 4 year investment. The initial rental was $365 per week in the first year and this was periodically increased to $450 per week as at October 2010.

So if we add his gross sale profit of $155,000 and his rental income of $85,900 this totals $240,900, equating to a gross return of some 79% on the initial $305,000 investment.

We encourage all of our readers to buy an apartment in the City of Adelaide ... hopefully from us : )

Free Parking (As long as you don't have a car...)

We noted with interest that research by the City of Sydney Council (as reported in the Australian Financial Review) shows 1 in 3 households across the Sydney local government area do not have cars. This means that planning authorities and developers are now re-thinking how many carparks need to go into new apartment buildings.

In Adelaide the conventional approach to apartment buildings has been to provide 1 carpark for a 2 bedroom apartment and 2 carparks for a 3 bedroom apartment in a building designed to attract owner occupiers (like 223 North Terrace). For buildings designed with the international student market in mind (such as the iPad in Waymouth Street) no on-site carparks are provided, and serviced apartment buildings (for example the Mantra on Hindmarsh Square) have relatively few carparks.

As carparks cost over $50,000 each in a multi-storey apartment building, savings can be made now that the city dwellers are starting to give up their cars. Developers will focus more on spaces in the building for bikes and scooters and possibly for carshare companies. Apartments without car spaces will be more affordable, and more affordable apartments will mean more sales and an increase in the city's population with less traffic congestion!