Buying 1970's Units.. Will this be more expensive in the long-term?

[jmillar]

I'm currently looking at this 3bdr townhouse in Campbelltown (built around 1974). There are already offers close to the $230k mark and it is all quite dodgy, with the owner wanting a condition in the contract stating that it can only be sold to an investor, and they must give the current tenant a 2 year tenancy agreement before they settle, as the owner doesn't want to upset their loyal tenant blah blah blah. I have spoken to some PMs in the area and it seems that $300/wk is market rent for an original condition TH in the block..

http://www.realestate.com.au/property-townhouse-nsw-campbelltown-114530591

Anyhow, I think it presents okay value at $225k as it should rent for $300/wk, and can achieve $340/wk and perhaps some equity with a reno.

My question though, is should I be concerned buying a 1970's property? I am only 21 and plan to hold all my properties long term, so I'm wondering if this is going to be problematic/expensive to maintain over the next 30-40 years. For example, if I were to buy this, when I'm 50 I'll have a 69 year old property.

Any advice is appreciated.

 

[The Y-man]

I don't think there would be a major issue as long as you check for the usual building stuff - rising damp, termites etc.

Most of the IP's we have a apartments built in the late 60's.

The Y-man

 

[jmillar]

Thanks for your quick reply Y-man. Would you recommend running a B&PI on a townhouse purchase or would a strata report sufficiently cover any potential issues?

 

[Shahin_Afarin]

Make sure you check out the agm report. sinking fund, etc and don't forget the obvious building inspection. Biggest concern would be a shower leak.

 

[The Y-man]

Thanks for your quick reply Y-man. Would you recommend running a B&PI on a townhouse purchase or would a strata report sufficiently cover any potential issues?

I'd get it done for the first one - but make sure you follow the person around, ask lots of questions, and they'll probably be happy to tell you what to look for next time.

The Y-man

 

[geoffw]

Your issues are likely to be things like hot water service or toilets. Sometimes buildings of that age are structurally better than what is wing built now. A good building inspection is well worth doing.

 

[geoffw]

I'd get it done for the first one - but make sure you follow the person around, ask lots of questions, and they'll probably be happy to tell you what to look for next time.

The Y-man

I think it's worth having done no matter how many you've bought. A friend had a building inspection which found that a car had run into a brick wall. That was fixed under the vendor's insurance policy. Something like that which you may not pick up could prove to be very expensive or dangerous if not found.

 

[jmillar]

Thanks for your advice. I did not have a B&PI done on my first IP (2 storey double brick walk up) as it was pretty straightforward, but I think on anything but a simple unit block I'd take your advice and get the B&PI done. I suppose it's a cheap investment compared to what the potential problems could cost down the track..

Thanks again.