Elm consists of units for owner-occupiers and investors. What investors need to be careful of in elm, apart from buying a unit with a view, is to ensure that the numbers for your investment property ’stack up’. What does it mean by ’stacking up’?

You want to ensure your holding cost is kept to the minimum so you will need a unit with the highest possible rental yield. The 1-bedders would be renting anything from $380-$420/week in the current market. If the 2-bedders top $570/week in rent currently, for a 5% rental yield, you shouldn’t be getting anything more than $592,800 in unit. Otherwise you will find outgoings like interest cost, body corporates eroding away your returns.

All our investors in elm got 1-bedders in there. That’s not to say 2-bedders aren’t good. It’s just that the yield won’t be as good as the 1-bedders. And that’s what I have concluded from my years of investing in Australia.

Email me your comments at info@pagreal.com

Elm is a 22-storey development by Fridcorp. Launched early last year, construction has already started on this development located along 18-24 Dorcas Street. I visited the site in June 2008 and back then there was a display unit being constructed under the old building for the purpose of marketing the units. Essentially, the development consist of 1 and 2-bedders, and the first four levels are parking lots for residents and visitors to the development. The fifth floor is where the pool and the gym are located together with eleven 1-bedders and six 2-bedders. The building has similar floor plate for levels 6,8,9,11-15; apparently the floor plates were somehow improved and they are a little different from the time they were launched last year.

I can only say that more 1-bedders were created in these levels, and being close to the city it is quite a sensible thing to do. On the east of the development is a 18-storey building (you can quite easily verify that on google earth) so if you are after the views of the Domain Oval next to the Botanic Gardens, you will have to go higher up(at least above 19th floor). On the western side of the building, it is literally unblocked. So if you go higher up (15th floor and above), you will get bay views. The southerly aspect of the building (facing Dorcas Street) will have views to the Albert Park Lake (famous Australian Grand Prix circuit) while the northerly aspect looks back to the city with nice city views. However there might be a chance that some of the older buildings around it might be demolished for a new tower.

I have a fairly good understanding of the development; the latest update from the developer is as such:

Construction works are proceeding on schedule.
Piling is complete, the basement slab and walls have been poured.
Part of the ground floor tenancy slab has been poured and the jump form is being erected to the lift core.
At this stage, the project is on completion for late 2010.

For some of you who are in Singapore and wants to have a chat with me for a more independent view of the development and the original price list, you may contact me at 98344408 or email me at info@pagreal.com.

Have a great weekend ahead!

The Reserve Bank left interest rates at record lows for a third straight month but indicated it has room to make further cuts if necessary.

After a meeting of the central bank’s board, the RBA left its cash rate at 3 per cent, a 49-year low - the same rate that has applied since its last cut in April, which was made in response to a slowdown in the economy.

”It looks as if the RBA is on hold for the longer term,” said Matt Robinson of Moody’s Economy.com. ”There is no real need or desire for further easing.”

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