1 bedroom apartments

C

chb

Hi All,

Been reading for a few months on and off now and i guess really thinking more about getting a place. I've been looking at this 1 bedroom apartment and I was just wondering what was everyone's views on it? Is it worth investing? It would be more of an IP and with rental returns of 300+/wk

Cost is about 300k

Is it worth forking out that much for a 1 bedder?
 
How much dirt are you buying? If it's an inner city high rise (ie. not much land component) then you will want to be very confident of CG potential.
 
Parramatta
1 year old
Major complex i believe, decent high rise
only low level though for this apartment
 
chb said:
Parramatta
1 year old
Major complex i believe, decent high rise
only low level though for this apartment
Click to expand...

As a general rule, avoid in a complex with more than 20 unit.

What is the outgoings on the property?

Also, wht is the floor space? Less than 50 sqm may make getting a loan difficult.

Cheers,

The Y-man
 
Parramatta is awash with apartments, there are so many.
I'm no expert on the subject but I think you'd want to look at what makes that particular one unique compared with the hundreds of others for sale.
 
Not sure about the floor space, will take a look at it this wkend i think.

What's the reason for avoiding in a complex of over 20?(supply and demand?)

Outgoings in property, is that referring to strata etc?
It's roughly $848 per quarter.

Yeah, definately i saw a fair number of apartments being sold in parramatta, this one is right next to Westfields pretty much, less than 1 minute away
 
Rob Williams said:
How much dirt are you buying? If it's an inner city high rise (ie. not much land component) then you will want to be very confident of CG potential.
Click to expand...


Nothing wrong with CBD high rise apartments so long as you dont get sucked into buying them off the plan. Ive dont quite well over the last 10years buying and selling cbd high rise apartments.

The secret is to
1) Make sure they have a car park (this is like land for a suburban property, did you know Melbourne city council are limiting new cbd apartments with car parks!!!)
2) Make sure you by on a very good intial yld (at least 7% gross)
 
tiger said:
Parramatta is awash with apartments, there are so many.
I'm no expert on the subject but I think you'd want to look at what makes that particular one unique compared with the hundreds of others for sale.
Click to expand...


Yes its true its very hard to get outperformance from a cbd apartment because of so many alternative apartments. The secret is thus to buy on the low points of the cycle and let the cycle move them up. Also look at replacement cost by looking at the price that off the planners are trying to flog off their new apartments.
 
chb said:
Not sure about the floor space, will take a look at it this wkend i think.

What's the reason for avoiding in a complex of over 20?(supply and demand?)
Click to expand...

You will have body corporate bun fights, where nothing will get agreed upon, and things will take years to fix. Try getting the majority of a 200 unit apartment to vote and agree on a repair/improvement project - been there, done that.

chb said:
Outgoings in property, is that referring to strata etc?
It's roughly $848 per quarter.
Click to expand...

Ok, so now your rental income is $206 per week (also allowing for PM management fees of 7% + GST ) and not allowing for vacancy.

i.e. it will be about 3.5% pa return.

Cheers,

The Y-man
 
chb said:
What's the reason for avoiding in a complex of over 20?(supply and demand?)
Click to expand...

Something like that, yes. It's generally because it's good to aim to be spending most of your money on the land component, not the building, since that will deteriorate over time while the land increases in value.

Having said that, you can still do this with high rise apartments, because even though you might only be getting a small fraction of the land (i.e. 5 square meters), that 5 square meters would probably be worth a lot. An empty block of land in Parramatta capable of taking (and zoned for) a high rise building would be worth in the 10's of millions of dollars. How many apartments are there?

The other significant reason for aiming for smaller complexes is when you have to deal with other owners and the body corporate. If you are in an argument trying to get your point of view across, would you rather try to convince 19 people or 199? In other words, it might be harder to get your voice heard in a bigger complex. Personally I like the really small ones like 5 to 8 units.

-Ian
 
Originally Posted by chb
Not sure about the floor space, will take a look at it this wkend i think.

What's the reason for avoiding in a complex of over 20?(supply and demand?)


You will have body corporate bun fights, where nothing will get agreed upon, and things will take years to fix. Try getting the majority of a 200 unit apartment to vote and agree on a repair/improvement project - been there, done that.
Click to expand...

We have 55 in our block and it is great :) We have a professional body corporate co look after the lot.
The commitee is a bit "fuddy duddy" but things DO get done. We find actually that most people just go "tick tick tick" down the voting form and everything gets passed. If we want something REALLY done, it is all in the wording of the motion :) make sure the answer is affirmative and it gets ticked off.

Sue
 
ianvestor said:
I think I have a fairly good grasp of how to make statements positive, but can you give an example of how to word something vs how not to?
Click to expand...

Sure. One of the shops(cafe) in the building (we are a resort block with 50 units and 5 shops) wanted to change the layout of the outdoor area that is covered in his lease line. He wasn't asking for anymore phsyical space just change things around abit. His new plan would have been a MUCH more sensible layout. BUT instead of the body corporate writing the motion as :

"Motion to change layout to this from this." they chose
"Motion to retain existing leaseline of cafe"

tick tick tick motion carried :( after a couple of appeals and a LOT of direct mailing to absentee owners he eventually got it through.

Sue
 
What yield should we be aiming for?
More accurate calculation i've done points to roughly 4.5%.. too low?

I'll have to check how many units there are in the complex...will visit there this wkend :)
 
I had a look at this over the weekend and there was around 90 units in the complex. A fair hefty amount, but i do like the look of the place. Not sure about the price and the body corp though, seems quite high.

This is my first time doing this thing, would a 30,000 less than asking price offer be acceptable?
 
Hi Chb,

Speaking from experience, I have found that my 1 bedroom apartment has not had much growth in the past 3 years and it's in a popular coastal suburb.

But it is probably because there have been so many apartments built in the area, so it just depends on the popularity of the area and how many apartments that have been built in Parramatta.

I'm with most people that say it's better to have at least some land with the unit.

Although in saying all of the above, an apartment can bring good cashflow to your portfolio.

Good idea to start with what you can afford and feel comfortable with.

Good luck!
Tarah :)
 
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