I was given a "heads up" this evening about a block of 8, 2 bed units in a WA wheatbelt town. They have been under offer but has come to light today that sale is about to fall over due to buyer not being able to get finance. Apparently buyer made a bit of a mistake with his original offer which saw it go unconditional - they now stand to lose their deposit. Of course I haven't actually seen the units yet only photo's which indicate they are probably about 30 yr old, nothing flash and probably in need of renovating. Asking price is $320K, current rental return around $600pw. Because there is 8 units this would have to be a commerical lend. All units on single title and all have street frontage. Very large block can be subdivided with a view to selling off the vacant section although land is not scarce or expensive there so probably only worth $40-50K. Not sure yet whether it is possible to strata the units. Annual rates around $6000 pa. Obviously this is not a positive cash flow deal ATM but a small rent increase could change this. Also may be potential to low ball against asking as vendor might be fairly motivated following sale fallen over and particularly if they pocket forfeited deposit.
Apparently there is a major shortage of rental accom. in town currently with largest local employer now trying to bring in overseas labour to fill vacancies. Normally I wouldn't really consider buying in WA wheatbelt and especially not now that boom is over as I wouldn't expect any worthwhile capital growth other than what we may be able to value add through reno or splitting title. Only reason I'm even considering taking a drive to have a look is that there may be some potential for +ve cashflow which could be used to offset our current -ve geared portfolio. This would help our servicibility which may enable us to buy a more CG focused IP. Any comments/opinions welcome.
Flatout
Apparently there is a major shortage of rental accom. in town currently with largest local employer now trying to bring in overseas labour to fill vacancies. Normally I wouldn't really consider buying in WA wheatbelt and especially not now that boom is over as I wouldn't expect any worthwhile capital growth other than what we may be able to value add through reno or splitting title. Only reason I'm even considering taking a drive to have a look is that there may be some potential for +ve cashflow which could be used to offset our current -ve geared portfolio. This would help our servicibility which may enable us to buy a more CG focused IP. Any comments/opinions welcome.
Flatout