Some little while ago I mentioned a complex of flats in Dimboola (Western District, Victoria), which a few members contacted me about.
Unfortunately for those interested, the vendor decided to keep the flats (who could blame him? a great return in a pretty country town).
The Agent rang me today to let me know about a block which has come onto the market in Horsham.
These flats return a little under 7% per annum which shows how the market has changed in the regionals in the past twelve months.
The Agent tells me the rents could be increased and are a bit under-rented.
For those who may be interested, these are four units on the one security title. Horsham (13,000 population) is a major regional centre. The flats are in Baillie Street opposite the Scout Hall and are within minutes of Firebrace Street (CBD) and also walking distance to TAFE.
This is the Planning Scheme link
http://www.dse.vic.gov.au/planningschemes/horsham/maps/horsham10zn.pdf
the units are about 40 years old, timber frame, faux brick cladding, metal roof. there are two x 1 bedroom ($85 pw & $70 pw) and two x 2 bedroom (85 pw & $95 pw). The town gas passes (no jokes, please) but the various gas appliances in the units use bottled gas.
The unit site also has access from two streets, Baillie Street and another street at the rear.
Asking $249,500 contact Rob Phillips 0428 387 698 or 03 5382 0029
http://www.realestate.com.au/cgi-bi...&t=res&ty=&snf=rbs&cu=oi-DEFAULT&fmt=&header=
property no: 101543677 on www.realestate.com.au
http://www.horshamrealestate.com.au/
******************
OK
To analyse the deal, here are a few tips:
Four units on one title will generally mean a lower LVR taking this as first security. This means that eg purchase price plus stamp duties & costs = 105%. I have lenders who will go to 80%LVR (purchase price) on multi-tenement securities but it is best to assume this would be taken as a 'commercial' security and the LVR would be around 65%.
So, you would have to have 40% (whatever that comes to in $ amounts) either in cash, equity, or a mixture of both.
Each tenement will be rated separately so allow full municipal rates and full water rates for each unit, although you will only need one insurance policy. I didn't ask Rob whether there are separate water meters, but if only one then you can't charge the tenants for water consumption. If separate meters then the tenants pay their own water use as usual.
Don't forget to factor in regular grass cutting and other periodic maintenance.
Rob says the two bedroom units are in 'very good condition' and the one bedroom units are OK but could do with a bit of a spruce up. He indicated that one bedroom in Horsham now generally rent for about $90 pw and two bedroom for about $100 pw.
The units have carports but I didn't ask whether they have private rear space or if the rear yard is 'common' space.
So although these units probably wouldn't have any depreciation benefits there would be the usual negative gearing benefit. Assume the Standard variable Rate of 7.07% but depending on finance the rate could be more or less than that. You would have to do the sums against your own marginal tax rate to determine whether this is a 'deal' or not.
Disclaimer:
I have no interest in this property and have no commercial connection or arrangement with Rob Phillips. The comments and information above are a mixture of information as told to me by Rob Phillips and that which I would consider 'common knowledge'. I cannot vouch for the accuracy of anything!!
However, if anyone is interested in these units I would appreciate a quick email after you've spoken to Rob. Your feedback would be helpful in that agents often tell me about various properties and I don't post them on the forum 'cos really most of the deals are pretty ordinary indeed. This one may be interesting because of the 'city' location and the style of the property.
Ochie dochie, over to you!
Kristine
Unfortunately for those interested, the vendor decided to keep the flats (who could blame him? a great return in a pretty country town).
The Agent rang me today to let me know about a block which has come onto the market in Horsham.
These flats return a little under 7% per annum which shows how the market has changed in the regionals in the past twelve months.
The Agent tells me the rents could be increased and are a bit under-rented.
For those who may be interested, these are four units on the one security title. Horsham (13,000 population) is a major regional centre. The flats are in Baillie Street opposite the Scout Hall and are within minutes of Firebrace Street (CBD) and also walking distance to TAFE.
This is the Planning Scheme link
http://www.dse.vic.gov.au/planningschemes/horsham/maps/horsham10zn.pdf
the units are about 40 years old, timber frame, faux brick cladding, metal roof. there are two x 1 bedroom ($85 pw & $70 pw) and two x 2 bedroom (85 pw & $95 pw). The town gas passes (no jokes, please) but the various gas appliances in the units use bottled gas.
The unit site also has access from two streets, Baillie Street and another street at the rear.
Asking $249,500 contact Rob Phillips 0428 387 698 or 03 5382 0029
http://www.realestate.com.au/cgi-bi...&t=res&ty=&snf=rbs&cu=oi-DEFAULT&fmt=&header=
property no: 101543677 on www.realestate.com.au
http://www.horshamrealestate.com.au/
******************
OK
To analyse the deal, here are a few tips:
Four units on one title will generally mean a lower LVR taking this as first security. This means that eg purchase price plus stamp duties & costs = 105%. I have lenders who will go to 80%LVR (purchase price) on multi-tenement securities but it is best to assume this would be taken as a 'commercial' security and the LVR would be around 65%.
So, you would have to have 40% (whatever that comes to in $ amounts) either in cash, equity, or a mixture of both.
Each tenement will be rated separately so allow full municipal rates and full water rates for each unit, although you will only need one insurance policy. I didn't ask Rob whether there are separate water meters, but if only one then you can't charge the tenants for water consumption. If separate meters then the tenants pay their own water use as usual.
Don't forget to factor in regular grass cutting and other periodic maintenance.
Rob says the two bedroom units are in 'very good condition' and the one bedroom units are OK but could do with a bit of a spruce up. He indicated that one bedroom in Horsham now generally rent for about $90 pw and two bedroom for about $100 pw.
The units have carports but I didn't ask whether they have private rear space or if the rear yard is 'common' space.
So although these units probably wouldn't have any depreciation benefits there would be the usual negative gearing benefit. Assume the Standard variable Rate of 7.07% but depending on finance the rate could be more or less than that. You would have to do the sums against your own marginal tax rate to determine whether this is a 'deal' or not.
Disclaimer:
I have no interest in this property and have no commercial connection or arrangement with Rob Phillips. The comments and information above are a mixture of information as told to me by Rob Phillips and that which I would consider 'common knowledge'. I cannot vouch for the accuracy of anything!!
However, if anyone is interested in these units I would appreciate a quick email after you've spoken to Rob. Your feedback would be helpful in that agents often tell me about various properties and I don't post them on the forum 'cos really most of the deals are pretty ordinary indeed. This one may be interesting because of the 'city' location and the style of the property.
Ochie dochie, over to you!
Kristine
