Advice on Units please

[Glenn]

I don't see $2000 in rates and levies being too much of a problem as $500 is probably for water rates and another $500 for council rates. That leaves $1000 which could reasonably be split up between $150/quarter in normal levies and another $100/quarter going toward a sinking fund in lieu of future repairs/maintenance. It is pretty expensive to do things to a whole block of units, an example being a quote of $9000 to paint a block of 12 flats that a 3 stories high, $6000 to put in individual gas metres....

A good idea would be to make an offer subject to your acceptance of the minutes of the previous 3 AGM's for the strata body. That way you get to see the budget for those years and get an idea of where the money is going and how it is trending plus you get to see who is vocal at the meetings and what their agendas are

Glenn

 

[Kevmeister]

Jakk:

I know of a coworker who recently paid < $50K for a unit with rental income of $165 per week, but body corporate fees are $1650 per year or something. Seems expensive but I guess it's the whole equation that's important, isn't it?

Steve:

By your suggestion on 30% approximate land value virtually any large (multi-storey) apartment complex is a no-no?

I looked at some apartments being built in Moonee Ponds. The aparts were around $450K and land component valued at $48K. This was a 17-storey tower or something.

Funny this was, at the time, I really couldn't contemplate paying $400K for the apartment itself, considering it was only 85 sq m or so. Almost $5000 per square metre. Is that figure high or not? I can only relate it to "average" residential construction whereby you pay say $4000-$7000 per 10 square metres (one square).

Comments?

 

[Steve Navra]

Hi KevM,

Yes you are correct, your example is just over 10% in land content, which sounds about right because you are buying just one seventeenth of the land!

However location plays an important role, so for example a unit in a high-rise on Manly beach would have in excess of a 45% land content - based on the extreme value of the land in that situation.
Likewise, Double Bay apartment (1 of 42) came out in excess of 40% as the land content.

Regards,

Steve

 

[phm]

Hi there.

Due to "technical problems" (dam internet!!) I apologise for the delay in replying. I would like to wholeheartedly thank everyone for their overwhelming help on my unit question.

I have been advised by the agent that the owner has decided not to sell the unit. Aparently he has been offered a large amount of money for another property and has been advised by his accountant to only sell one property this financial year. Typical.

I've printed off all of your advice however for future reference. Don't suppose anyone knows how to print off posts without colouring in the background of the page?

In answering some of your questions, Denise, you were asking about the reason why the tenant didn't buy the property himself. He's been through a divorce and property settlement (agent's words) and is retiring in 10 years. It sounds like he is just looking forward to that 10 years time and doesn't want any other commitments, perhaps?

Hi Donna. You don't have the residex rental return for houses for Gladstone, do you?

Once again, a big thank you to everyone for your help.

 

[Glenn]

Try clicking on the page, perform a Ctrl + A, then open Notepad, perform a Ctrl + V, then print.

GLenn