Flock of bats

Am looking at a little (1 x 3, 3 x 1) block of flats (converted house) All tenants are individually billed for electricity, water, etc. I know the rates, it (supposedly) has extremely low vacancy rate, all residential tenants. Apart from a building report, checking the leases (some have gone onto month x month) to look for any anomalies, could you all give me some ideas as to what else to look out for as I've never ventured into this territory before. If I get serious, could I ask neighbours if there's disturbances/fights etc? All input gratefully received
 
1. See if it is council approved as such. If it has been done for a long time it might have "existing use rights" meaning that even if would not comply these days it is still OK becasue it has been that way for a long time.
2. I would not care about disturbances / fights. I'm not the moral judge of what my tenants do. This will change from tenancy to tenancy anyway.
3. Check fire safety compliance
4. Check council rates - sometimes they are higher for this type of property
5. Pest & Building as you've mentioned
6. Check with council about, if you had a fire and the whole place was razed, would they allow you to rebuild the same again?

As a matter of interest - what's the gross yield on this one? sounds great :)
 
As has been mentioned above, my concern would be fire safety and also checking if council is aware of current status. If it has been going for a while usually can qualify under a type of grand father clause.

Would be preferable (if it were me) that common walls separating each dwelling were solid brick. I'm assuming they are in Qld, I would be careful of VJ board walls.

When I was looking for something similar a couple of years ago, a lot of VJ walled palces were coming up in Bris. Great locations mind you however as an out of towner and being very green to the BCC regs I passed them by, perhaps to my detriment. I personally would prefer solid walls separating the tenants. With four doors, the neighbourhood is beyond your control.

Also check how your insurance will deal with these. As they (i am assuming) are in one line, if you are borrowing, you may find you get a commercial LVR even though you'll attract resi interest rates.

Care to share the yield on asking price?

Good luck with them.
 
What is BCC? Went and had a look from the outside yesterday. I thought it would have been a converted house, but think now it was purpose built as it is a huge rectangular box, with seperate entry doors. The two carports are a joke and would only fit a mini in lengthways. Position is good, maybe 3ks from the beach. If it wasnt fire compliant and you could get it at the right price, there is a very good product on the market for seperating duplexes, only about 50/100mm thick, you could fix that onto the inside walls.
Would definitely have an asbestos roof which has been painted over. The whole place looked gerry built, but when I looked further, the outside walls were all straight and painted well. Mainly looked crap because the entire front apron and down to first flat has been covered in bitumen, and the wooden slats around the first balcony really needed a coat of stain. Very hilly area and this is down on like a little service road so you can see down onto the roof. I cant get inside until notice has been given to tenants. It is advertised at $799k owner has dropped price to meet the market, the yield is $840pw (3 X $190 and l x $270) I dont think it is worth $799 and was thinking $720 which would practically make it cf+
 
Depending on your funder, finance may not fit properly either

This style of property can be accomodated with some lenders at good LVRs and rates but youd have to look around.

ta
rolf
 
Hi Celica,

BCC is Brisbane City Council. Are they in Brisbane?

Yield on asking is 5.5 % and on your thinking of 720,000 is around 6 %. Unless this is supremely located and woefully underlet, I would think that this is top dollar also.

I would personally want well over 6 % on such a product unless it is say 5-10 km from central CBD of a large capital city, and even then, such product is available in metro Sydney for between 6 to 6.5 % yields and all well within 10 km of CBD

You state it is 3 km from the beach...does it have other amentity, such as train, buses, shops, schools, etc? Can you walk to these?

As far as fire rating and such like, I am no expert, so don't quote me on this, however the separation of common walls actually needs to extend into the roof space/cavity, not just on the walls from floor to ceiling height. This may vary from state to state and I may be misinformed, however I would check into the actual requirements with council now before you even inspect them.

What are other comparables in the area like as far as asking and sales prices and what are the rental rates around the precint you are looking for similar product? That way you can tell if they are underlet and may have some room to move.
 
Am looking at a little (1 x 3, 3 x 1) block of flats (converted house) All tenants are individually billed for electricity, water, etc. I know the rates, it (supposedly) has extremely low vacancy rate, all residential tenants. Apart from a building report, checking the leases (some have gone onto month x month) to look for any anomalies, could you all give me some ideas as to what else to look out for as I've never ventured into this territory before. If I get serious, could I ask neighbours if there's disturbances/fights etc? All input gratefully received


Celica,just have a quick look at the way the plumbing is set up,if all have separate water meters then that's fine,if not and all run off one meter box then that will be a high cost problem to turn around into several water meters, plus if the roof it's the super 66 fibro roof that also would be in the replacement timeframe so allow for a new roof,but this one sounds good if it's walking distance to the beach,the value would be in the site on this one,just one question what is the land area and zoning?..imho..willair..
 
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