One of the best ways to make a profit from real estate is…
to find areas where there is going to be change of use or what they call gentrification.
Developers use this strategy to buy vacant land or old factories/homes on large blocks and redevelop the site.
But for those of us without the expertise or prepared to take the risk to do a development we can still make a profit from finding change of use locations being developed by others but get in early so that there is still some upside.
We did just this with our clients 5-10 years ago with the redevelopment of Brompton in SA from old factories into upmarket medium density townhouses. The early adopters were able to buy in what seemed expensive at the time, a 3 bedroom townhouse for just under $300,000. I remember my first client to purchase in Brompton saying “You’re kidding… look at that old factory across the road”.
Today that old factory is gone and the property would be worth about $600,000. A good profit in less than 10 years and during some tough times.
Brompton seems to have peak for the moment. Those who know my 5-7/3-5 principle will know what I mean. (More on that here)
But now there is a new area in SA where change of use could see good profits made in the next 7-10 years by those who get in early. That area is Prospect.
The properties at Prospect are not yet on the market but the developer has let me put in “registrations of interest” for my clients and that will give them first option when they are released to the public, in a few weeks time. (artist impression below)
I now have plans and specifications with tentative pricing for the Prospect townhouses. There are 2 and 3 bedroom options.
On the weekend I went to look at the Scott Salisbury Hospital Lottery home at Gilberton.
While I think the lottery is a great cause and whoever wins the home will be very pleased, I couldn’t help thinking $1.5M for this home makes what I have found at Prospect a bargain… and bodes well for the future growth of the Prospect properties.
Give me a call if you have any interest or would like more information.