cheap IP for sale in blue-chip location

[capitalist]

Hi people,
I have a post going here:
link

My post was to obtain some advice which i've found helpful, however i was also recommended to post the details of the IP i am selling at 15/12 Tivoli Rd South Yarra, Melbourne:

Invest or Occupy: in this top floor North facing 1 bedroom apartment which has been freshly painted and recently carpeted. Features a sun drenched leafy outlook, direct access to Rockley Gardens and the South Yarra library, built-in-robes, laundry facilities and is in a sought after location in leafy Tivoli Rd. Literally minutes away from Toorak Road and Chapel Street - enjoy the cafes, restaurants, bars and shopping in this blue-chip location.
Public transport is well catered for with tram and railway lines also minutes away, doing away with the need for a car in this prime inner city area.

If anyone is interested in a well located, solid investment that will show excellent growth, come along and make a bid!
This is truly an excellent investment, and would really suit someone who is looking for their first home or a solid investment property as i imagine it will sell for $150k+.

The unit currently returns $7,284pa ($607 pcm, $140pw) but is at mate's rates. Current market value would be closer to $8,328pa ($694pcm, $160pw). I know the yield isn't that great, but the trade off is capital gains and nil vacancies which you will certainly get in this location.

It's also very low maintenance with low outgoings (B/C = $824 pa, Council = $310 pa) and a very houseproud tenant who has been there for over 4 years.
The unit also has room to improve if someone wanted to add value to it for later resale at a profit, or to increase the rent.

I have also listed it
here if you'd like some more info and to see some photos.

It is listed for auction on site on 29th March at 11am and is open for inspection on Wednesdays and Saturdays.
Open for inspection dates and times:
Saturday 15/3/03 = 11:00am - 11:45am
Wednseday 19/3/03 = 12:45pm - 1:15pm
Saturday 22/3/03 = 11:00am - 11:45am
Thursday 27/3/03 = 12:00pm - 12:30pm
Saturday 29/3/03 = 10:30am - 11:00am (auction time)

 

[Jamie]

Originally posted by capitalist
Hi people,

If anyone is interested in a well located, solid investment that will show excellent growth, come along and make a bid!
This is truly an excellent investment, and would really suit someone who is looking for their first home or a solid investment property as i imagine it will sell for $150k+.

The unit currently returns $7,284pa ($607 pcm, $140pw) but is at mate's rates. Current market value would be closer to $8,328pa ($694pcm, $160pw). I know the yield isn't that great, but the trade off is capital gains and nil vacancies which you will certainly get in this location.

It's also very low maintenance with low outgoings (B/C = $824 pa, Council = $310 pa) and a very houseproud tenant who has been there for over 4 years.
The unit also has room to improve if someone wanted to add value to it for later resale at a profit, or to increase the rent.

I have also listed it
here if you'd like some more info and to see some photos.

Hi capitalist,

I clicked on the link but all I could find is a photo of 2 park benches and 3 trees. Arent there any photos of the property itself?

You also mentioned that the property has been recently painted and carpeted, but there is also room for improvement. Does that mean it is partially renovated? I wonder what further improvement you could undertake in a small unit with no external walls, facade or garden area. What further "improvements" could one undertake, and are there any that will be "necessary" in the near future?

How old is the unit? The ad. says 10-50, so Im not sure exactly how old the property is. In what condition are the bathroom and kitchen?

How many units are in the block?

You mention that the new owner will face no vacancies, but you have had a houseproud tenant for four years. IS the tenant currently on a lease? If not, has the tenant said or implied he/she would be willing to sign a long term lease with a new owner, even if they were to put the rent up like you suggest?

This does seem like a solid, well placed investment, however I think you seemed to have skimmed over a few points which may be of interest to the forum.

Best wishes,

Jamie

 

[capitalist]

Hi Jamie, thanks for the reply - it's good to get some kind of response.
You're right about the lack of pics. The photo you are describing is part of Rockley Gardens which the block has direct access to through the rear fence, and is the "backyard" maintained by Council - a great spot to get some sun and read a book.
I have some more pics which i will upload soon, though most are from the front of the block and the street it is in. However i do have one of the kitchen area, though it is quite small.

The unit is a small 1 bedroom with a lounge/living area adjoining the kitchen and a bathroom off the bedroom. There is a shower over bath, seperate toilet coming off the bathroom and laundry facilities in there as well...so it's hard to get a photo that can sum up the floorplan.

The website only allowed me to put in that range of 10-50 years, though i'd say it's about 20 years old and there are a total of 15 units in the block. This one is #15 and is the best located in the block. It is on the top floor at the rear of the block and has windows on 3 sides.

I guess you could say it's partially refurbished (paint and carpet) though there is room to improve, namely by updating the kitchen and bathroom (the main areas). They look like they were renovated in the early 90's with modern brass fittings but are now starting to look worn. The kitchen looks original and could do with a cosmetic makeover with new handles, benchtop, sink and doors. Having said that, none of these are "urgently" required and it will stand on it's own for several years to come.
Low cost improvements that could be done to improve = window coverings in the lounge, kitchen and bathroom; and all light fittings could also be replaced.

The tenant is not on a lease at the moment but a periodical/month-to-month tenancy. This is ideal as the tenant only requires 65 days notice (settlement period?) to vacate if the purchaser wanted to live there or gain access to refurbish and then re-let.
The tenant has indicated that she would like to stay on as she works locally. She also knows she is on a great deal at the moment and i doubt she would begrudge a rent increase, albeit one in increments of $10-$20 per week as she now has new carpet, fresh paint and new venetians in the bedroom. She has been paying the same rent since she moved in with no reviews!
The unit opposite (#14) was rented 2 weeks ago at $160 pw on a 12 month lease and is in poorer condition than this one.

 

[geoffw]

Capitalist,

A quick question on the age.

You say it is about 20 years old. Is there a chance that building started bfore building depreciation was allowed- I think fromsomewhere in 1986?

 

[alpina]

capitalist,

although i are not in the market for a melb unit, i must commend you in the way you have responded to the questions - you come across as very genuine and informative

julie

 

[capitalist]

geoffw,
I think the building was built in 1981, so i guess there's no depreciation left on the building. But of course the new carpet can be depreciated as well as any other work done such as the kitchen or bathroom.

alpina,
Thanks for your kind words...i try to do my best
I guess Jamie also gave me an opening there to give more information - so i must thank him too

I've also put up some more photos, so please have a look and i welcome any other comments, criticism or advice.

 

[Andrew]

Cap, how much did you get for your appartment? If you don't mind
me asking.

andy

 

[capitalist]

I eventually got $172,500 which was about what i expected.
It was passed in at $166k and negotiated for the selling price by the highest bidder.

Of course more is always better, but i think i did ok with it considering it was a small 1 bedroom with no carpark on title, the market was starting to flatten out and the Iraq war had just begun. I paid $76k for it in April 1996 and it has been cashflow positive from day 1.

Mark

 

[Rickardo]

Sounds like a pretty nice investment for you, why'd you sell? if you don't mind me asking

 

[capitalist]

Folken,
I was a very reluctant seller because it was such a solid investment and would have been an ideal keeper, not to mention the CGT, agent fees etc I had to pay. But i hope to get a replacement IP within the next 1-2 years.

Basically I needed the cash to contribute to a PPOR which i want little debt on, and to also help kick off my business.

I was also in a good situation to trigger a CGT event because i've been travelling o'seas for the last year and have been unemployed with a minimal income.

 

[BUNDY]

Capitalist,

Just out of curiosity, what type of business are you kicking off?

BUNDY

 

[capitalist]

Bundy,

...it's a secret

...at the moment, but it will be on the Gold Coast - your stomping ground i believe?

Mark