Commercial Question

[Christie Lee]

Hi there,

My friend is thinking of buying a shed. She told me this:

~ the price is $240,000
~ they will be buying the shed only, not the land.
~ there are other sheds in the complex
~ the shed is not currently rented
~ there is a body corporate
~ the rent will be double what a house at that price would be. I'm assuming a house in this area for that price would rent at approx $200pw
~ she beleives the value of the shed will rise with time

Do you think this is a risky aquisition? Do you think the shed will go up in value? I think that it wouldn't because it's the land that goes up in the value, not the building. What do you think?

Thanks,

Christie

 

[MattR]

Need more info...

Why is the shed for sale but not the land?
Is there a lease agreement for the land that the shed is on? If so how long is that agreement?
Hom much are the running costs (eg strata fees)?

What is the likelihood of your friend finding a tenant for the shed?

Will your friend be using the shed to grow hydroponic crops?!!

 

[Dazz]

Do you think this is a risky aquisition? Do you think the shed will go up in value? I think that it wouldn't because it's the land that goes up in the value, not the building. What do you think?

I think you need to fully describe your friend's situation a tad better before anything can be concluded.

Is she well established, and bought these things before. Does she have good service-ability. What's her appetite for risk. Hold old is she. Does she have dependents ??

And then there is a myriad of questions regarding the property that are unanswered.

Once all the above have been answered, and married together to see how they all fit together, only then would any sane and reasonable person be in a position to proffer an opinion.

 

[Christie Lee]

Thanks guys. I will have to try and get some more information from her.

 

[grossreal]

hi Christie Lee
couple of thing
1. has the buyer any people that want to rent the shed
2.have they got the capacity to cover the rent for 12 months
3. is there a requirement for these sheds in the area so can they rent it quick
4.how long is the lease on the land.
5. is there demand in the area or these sheds
if its no to 3 of the above 5 forgat it
and don't look at it and for 4 if the lease is less the 25 years put no
my.002