Investing in Council Housing Areas

Hi All,

I am new to the forum and would be so grateful for your advice.

I have recently invested in my first property and am already looking into new areas to invest.

I have identified an area about 30km North of Adelaide, it is a council housing area (built in the 1960's) however the area is currently undergoing development with new provision of schools, shopping centers and a an expressway which would make the commute to Adelaide quicker and reduce traffic congestion in the area.

Property is very cheap, however much (from what I can see from my research) is still council estates, and therefore not an entirely desirable place to live. (Possible risk with tennants as well?).

Yields are between 5.5 – 6.5% and I would hope that once all the development is complete that the area will improve, and property value would increase especially given the proximity to a capital city. The Government is expecting the population of the area to double by 2022.

My question is, is it worthwhile investing now – if I can afford to sit on it for 5 – 10 years in the hope of Capital Growth, or is it better to avoid areas like this. The risk is that in 10 years the area is still undesirable and I haven't made a significant return on my investment.

I'd be grateful for your thoughts and advice.

Kind regards,

Joanna