From: Paul Zagoridis
In Sydney I generally buy units in older buildings. This is in contradiction to conventional wisdom to buy new for the depreciation and maintenance benefits. The deals I like tend to be in older buildings.
Anyway two years ago, a friend asked me to run the numbers on some new buildings (<3yrs old). The numbers looked good (not great). He liked the depreciation these newer buildings gave him.
Fast forward to today. Both buildings have major structural problems. The builders in each case have wound up the shelf company that did the development. You guessed it, HIH is the insurer of both builders AND the building inspector. This means the owners corporation is up for repair costs AND the costs of action to recover these costs from anywhere they can. Very costly special levies are involved.
Now, older building do present maintenance problems. But once the building is 15-20 years old you know if it is collapsing. Building inspections are fairly straight-forward and generic. Plus you aren't paying a premium (or profit) to a builder's $2 shelf company.
There's a conversation starter for you.
Paul Zag
Dreamspinner
Oz Film Biz is at
http://www.healey.com.au/~paulz
In Sydney I generally buy units in older buildings. This is in contradiction to conventional wisdom to buy new for the depreciation and maintenance benefits. The deals I like tend to be in older buildings.
Anyway two years ago, a friend asked me to run the numbers on some new buildings (<3yrs old). The numbers looked good (not great). He liked the depreciation these newer buildings gave him.
Fast forward to today. Both buildings have major structural problems. The builders in each case have wound up the shelf company that did the development. You guessed it, HIH is the insurer of both builders AND the building inspector. This means the owners corporation is up for repair costs AND the costs of action to recover these costs from anywhere they can. Very costly special levies are involved.
Now, older building do present maintenance problems. But once the building is 15-20 years old you know if it is collapsing. Building inspections are fairly straight-forward and generic. Plus you aren't paying a premium (or profit) to a builder's $2 shelf company.
There's a conversation starter for you.
Paul Zag
Dreamspinner
Oz Film Biz is at
http://www.healey.com.au/~paulz
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