340k asking block of 5 units what things I need to consider ?
- Thread starter Janice
- Start date
2 titles probably means that 2 units are on one title and 3 units on a second title.
You need to consider what the other holding costs are. Council & water rates may be disproportionately high. What about maintenance, property management, insurance, etc. The cash flow may not be as good as you think.
You need to consider what the other holding costs are. Council & water rates may be disproportionately high. What about maintenance, property management, insurance, etc. The cash flow may not be as good as you think.
Going from the micro to macro : Population size and stability, is the population growing, proximity to other large population areas, diversity and current state of the economy, vacancy rate, ability to insure, will a local pm manage it?Flood/fire/crime risk, number of new developments, are units common or does most of the population live in houses? Are the vacant units advertised at market rent or over to artificially inflate the yield. Compare with recent sales, are there any? and if so whats the average number of days on market.
Finally what am I attempting to achieve, does the high yield compensate for concentration risk and possible slower growth and can I obtain finance with a resi loan and suitable LVR?
Finally what am I attempting to achieve, does the high yield compensate for concentration risk and possible slower growth and can I obtain finance with a resi loan and suitable LVR?
The quality of the actual asset is very low , more like cabins than units
Won't attract very good tenants
What's the yield 10%?
I think a house with 7-8 % is a better option
Remembering a few things - need a bigger deposit for the units
Your rates will be higher
Your chances of good growth are linked to rental return as your future buyers are going to be investors - with deep pockets needed (No high LVRs)
The house will appeal to more future buyers better chance of growth
Also if these unit blocks are a good buy then why are they being sold?? They should be an easy hold shouldn't they ?
Won't attract very good tenants
What's the yield 10%?
I think a house with 7-8 % is a better option
Remembering a few things - need a bigger deposit for the units
Your rates will be higher
Your chances of good growth are linked to rental return as your future buyers are going to be investors - with deep pockets needed (No high LVRs)
The house will appeal to more future buyers better chance of growth
Also if these unit blocks are a good buy then why are they being sold?? They should be an easy hold shouldn't they ?
I don't mind the town these units are in, I have looked there for houses on several occasions......... BUT there is probably no way I'd be buying what looks like a crap load of asbestos to me.
I can handle a little (pretty much impossible to avoid in old property), but being totally clad in it looks to be why it's so cheap. People just get nervous about the stuff.
How much does it cost to get rid of it all, I wonder?
I can handle a little (pretty much impossible to avoid in old property), but being totally clad in it looks to be why it's so cheap. People just get nervous about the stuff.
How much does it cost to get rid of it all, I wonder?
Yep the town is fine
Looked at them and figured why would you bother rennovating them? Still be left with a crappy unit - bones arn't there
Cost to get rid of asbestos varies wildly
Depending on the density of it
Quotes for removal of all internal sheeting in one of ours were between 17 and 23k
125sqm of floor space
We got a lab test and had the bad stuff (low density??)
Apparently it's around 3 times the price to professionally remove
So we sheeted over it
One thing to note Janice , is that everyone has gone off and checked the property as you gave fairly unique details .
If it had been a really good deal it might be off the market by now .....
I never post specifics unless I've purchased .
Cliff
Yep we are a nosey bunch aren't we?
As per above OP - lots of questions, many about understanding the town's economic and demographic future, then some about the sub area and street, rental demand (in particular) and the property itself. Structure, space, fire rating, can it be easily strata titled for example (the more exit strategies the better) etc
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