Buying a cheap studio in unilodge, broadway, sydney, too good to be true?!

[wwwqi]

Dear All

I recently was looking at some studios in the unilodge on broadway, in sydney. They appear to be an excellent purchase, with great returns. However, there's so many units on sale, each with great returns that it almost seems like a trap....my gut instincts always tell me that if it sounds too good to be true, it probably is....hence im turning to the members of this forum whom might be able to shed some light on it.

Cheers!
wwwqi

 

[Bandita]

My suggestion would be to stay away. Financing will be very difficult (60% LVR maybe the max - depending on the size - but they are usually very tiny) - and capital growth will be low (as you can only sell to investors - not owner occupiers which are 70% of the buying market).

Cheers,
Jen

 

[boomtown]

Correct.

Specialised student housing is a trap - CGs non existent.

 

[THEHEATH]

Like you said, there are "so many for sale", what happens when you want to sell? You've got a limited market to sell with and a whole heap of competition.

 

[tess85]

have you seen the apartments? I have... tiny... no room to swing a cat. everyone else has made valid points.

 

[Bradsdad]

Finance will be near impossible for "unilodge" appartments. Have had a few clients here in Melbourne looking at them and the management agreement is restrictive (no matter hwta the RE tries to tell you) There were a couple of other blocks of similar appartments however that finanace to 70% was possible for. 13.5 Msq was the smallest sold for $130k ish with rental return of $180-$200 p/w. No CG of note expected but a very nice rate of return.


Regards
Steve

 

[buzzlightyear]

Finance will be near impossible for "unilodge" appartments. Have had a few clients here in Melbourne looking at them and the management agreement is restrictive (no matter hwta the RE tries to tell you) There were a couple of other blocks of similar appartments however that finanace to 70% was possible for. 13.5 Msq was the smallest sold for $130k ish with rental return of $180-$200 p/w. No CG of note expected but a very nice rate of return.


Regards
Steve

Steve, out of interest were the returns guaranteed in the lease, or was the income variable based on the occupancy of the apartments?

And do financiers see any difference between the two when setting their policy with regards to LVR?

 

[Nathan]

Steve... where is the good rate of return? obviously your not talking bout the $180-200pw on a 130k purchase...

Finance will be near impossible for "unilodge" appartments. Have had a few clients here in Melbourne looking at them and the management agreement is restrictive (no matter hwta the RE tries to tell you) There were a couple of other blocks of similar appartments however that finanace to 70% was possible for. 13.5 Msq was the smallest sold for $130k ish with rental return of $180-$200 p/w. No CG of note expected but a very nice rate of return.


Regards
Steve

 

[Bradsdad]

Steve, out of interest were the returns guaranteed in the lease, or was the income variable based on the occupancy of the apartments?

And do financiers see any difference between the two when setting their policy with regards to LVR?

Possession taken of appartments & rented privately. Option to rejoin letting pool. For memory if you wanted out of the pool it was either 3 to 6 months notice and the pool couldn't be reduced to under 60%.

 

[boomtown]

And how much are vacancy rate, body corporates, management fee, administration fee etc etc. You've quoted gross figures it would surprise me if a quarter of the income was sucked into a nexus of fees and it was vacant a quarter of the time.

 

[wwwqi]

thanks all for your points! Will definitely look elsewhere,
what do ya'll folks think of newtown and studios and one bedders over there?

 

[Peter 14.7]

thanks all for your points! Will definitely look elsewhere,
what do ya'll folks think of newtown and studios and one bedders over there?

All good, small stuff, always rents well. Consider this block in Chippendale. I have one there and it ticks all the boses. Parking to studis (rare), low BC and well maintained, strong demand.

http://www.realestate.com.au/cgi-bi...t=&header=&cc=&c=26021360&s=nsw&tm=1222927373

This was asking $249k and woudl rent for $300 a week easy.

Avoid Unilodge. These were too good to be true when released 10 years back and still are. Like buying carparks. Controlled market. Nil CG. Huge Fees. Only worth it is kiddie want to go the Sydney Uni or UTS and thena big investment is kid changes mind.

Also avoid Waldorf Apartments in Chippen Street.

Peter 14.7

 

[young_gun]

hey guys a couple of years ago when I was looking to get into buying an investment property I looked into buying one of these apartments at Broadway through "uni lodge".

My advice to you stay away from these like the plague!!

When I was looking at buying one of these I did some reaserch on RP Data, bascially there properties have got 0% capital gain. These properties have been selling for the same price for over 10 years !! When you take into consideration the cost of strata , the fact there are no capital gains you are better off parking your money in the bank!

Bascially the apartments are tiny at 17sqm2 and operate via a rental pool. So you are weighed down by other units that are not actually being rented out.

 

[tess85]

thanks all for your points! Will definitely look elsewhere,
what do ya'll folks think of newtown and studios and one bedders over there?

strong rental market - with young professionals and (some cashed-up) students living in those types of places. not sure about CG though... some room to move, although newtown has already had its crazy boom a few years ago.

 

[mykie]

Hey mate
I bought an investment studio apartment last year in East Melbourne and I have enjoyed some capital growth as one opposite me sold for $205,000. I paid $175,000 for my one so I am pretty happy. When I was purchasing it I was looking at getting one at the unilodge also and just found them to be pretty useless in terms of capital growth. Any everyone else on this forum seems to make the valid points and reasons why I did not go down that path. Finance was a bit of pain for me also I had to save $25000 as I could not get the entire amount. If you are going to go down the path of a studio apartment go for a larger one where you can add a possible wall to make it a 1 bedroom apartment, I am looking at doing that as my buyers agent friend believes it will add value.

 

[wwwqi]

thanks a bunch fellas! real good solid advice! will definitely heed it.

 

[joshboy]

Hi! can i ask why you say to avoid the units in Chippen Street?

they seem pretty good to me.

 

[Rolf Latham]

Hi Josh

welcome to the forum

In what way are they Good ?

ta
rolf

 

[joshboy]

for what i am trying to achieve they seem good.

cost of the place is low-
return is high-

based on my rough calculations if i was to buy a 1 bedder the palce would be neg geared slightly- a nominal hold cost to me.

i am not interested in living there myself so it is an investment property-

i am looking at this for the very long term- 20y + so that when i retire i have more than income source apart from super-

what are your concersn on these? plesse let me know

 

[Rolf Latham]

Hiya Josh

The main issue is obtaining finance and how that affects the performance of the asset

This product has limited resale capacity, hence many lenders dont like it.

ta
rolf