Large apartment blocks? Good or bad?
- Thread starter malibu
- Start date
Hi malibu,
SOme questions if you don't mind.
1. Walk up or lift?
2. High density area (for units)?
3. Any pool or atrium?
4. Main road and access?
5. Majority Owner occupied or Investor?
If you can possibly answer these questions it might give us a better idea of the type of unit you are talking about.
Generally though, the smaller the better.
Regards JO
SOme questions if you don't mind.
1. Walk up or lift?
2. High density area (for units)?
3. Any pool or atrium?
4. Main road and access?
5. Majority Owner occupied or Investor?
If you can possibly answer these questions it might give us a better idea of the type of unit you are talking about.
Generally though, the smaller the better.
Regards JO
Personally I don't like large blocks for these reasons that I expressed on this thread: http://www.somersoft.com/forums/showthread.php?t=55968
1. No uniqueness. What can you do to make your unit more desirable to tenants if there is a time where rental demand is less than it is today?....probably nothing except drop the asking rent
2. If econominc circumstances change, as they do, and a number of fellow owners have to sell at fire-sale prices to get out, what does that do to the value of your unit?.......comparable sales in the same building are how valuers value accurately
3. Strata levies are high
4. Low land content
How much did you want to spend and we might be able to give you a few pointers?
We owned a unit in a complex of 80. It was a very successful investment.
What we did right:
If it is a large block, you MUST buy a unit in a preferred position or with some aspect that makes it stand out. We owned one of the best positioned units in the complex, and most tenants were sourced from within the complex. The manager actually had a "waiting list" of tenants who wanted to stay in the complex but move to a better position.
Never be fooled by buying the cheapest unit in a large complex, even though the agent will point out the price advantage. It will always be the last to be rented. It is only cheap because it has disadvantages that tenants are quick to spot.
At any time there will probably be more than one unit available for rent. Make sure yours is the better choice.
Marg
What we did right:
If it is a large block, you MUST buy a unit in a preferred position or with some aspect that makes it stand out. We owned one of the best positioned units in the complex, and most tenants were sourced from within the complex. The manager actually had a "waiting list" of tenants who wanted to stay in the complex but move to a better position.
Never be fooled by buying the cheapest unit in a large complex, even though the agent will point out the price advantage. It will always be the last to be rented. It is only cheap because it has disadvantages that tenants are quick to spot.
At any time there will probably be more than one unit available for rent. Make sure yours is the better choice.
Marg
Mmmm, that is going to be the kicker.
BUT you can get that in the Inner West a 2brm, 1 bath, 1 car even (although sometimes no car). Maybe in need of some TLC and maybe in bigger blocks - perhaps 24 or so in a complex (but not 80!
)Has been a few around Meadowbank if your looking for two beds.
But it will be 30+ years old.
Noticed a 1 bedder at Top Ryde for 270 off blaxland road.
The new Top Ryde complex is from 410 for 1 bed.
Marsfield near uni a few 2 beds at 400 mark but again 30+
Some good rents from the uni students if you ad another wall or two.
Most of these are low strata, no lifts no pool,gym.
But it will be 30+ years old.
Noticed a 1 bedder at Top Ryde for 270 off blaxland road.
The new Top Ryde complex is from 410 for 1 bed.
Marsfield near uni a few 2 beds at 400 mark but again 30+
Some good rents from the uni students if you ad another wall or two.
Most of these are low strata, no lifts no pool,gym.
Spot on Marg, in my opinion.
My only saving grace in my earlier days of investing was that I bought an Apartment that had the largest floor plan of which there were only three or four on the site.
I never had any trouble renting it and I had more growth than the 2BR's.
Propertunity
Also true and valuable points to consider.
If your block is mostly investor owned you will have alot of rentals and alot of investors wanting to exit ion tough times. You may also say you will never sell, but circumstances can change. Always have an exit strategy.
Regards JO
I currently live in a complex with 70 units. When it comes to strata and decisions made, you really are just a number. I joined the executive committee for a little while and was a waste of time due to the people already on it making their own decisions and being very chummy with the strata manager so changes can be made without much consultation with the rest of the owners. As I mentioned in another thread earlier this week, an extraordinary meeting is being held this week to agree to call for two special levies to increase the admin fund. The executive committee is withholding balance sheets/spreadsheets to the non committee members until the night of the meeting which I believe is to leave us out of the loop and more likely to agree to the levy. This wouldn't happen with smaller blocks.
Also, obtaining finance might be tougher. If the bank you choose to go with already has high exposure in the builder they may not like a high LVR lend.
Also, obtaining finance might be tougher. If the bank you choose to go with already has high exposure in the builder they may not like a high LVR lend.
Bit discussed here http://www.somersoft.com/forums/showthread.php?t=58066
