Opinions on this property. St. Kilda, Melbourne.

[Compleks]

http://www.realestate.com.au/property-apartment-vic-st+kilda-114561851

I went to the inspection for this property earlier in the week.

I have been pre-approved for a loan, but my upper limit is $350k purchase price. The agent said this property has been listed since January for $390k. Recently a pipe burst upstairs, flooded some of the walls and floor and the body corp had to fix it up, hence the reduced price.

Which I find a little odd. If they fixed it all up, then surely value would not have been effected?
Either way, the vendor is apparently very motivated.

So, hypothetically, lets say I could pay $350k for this. What do you think of it from an investment point of view?

I would buy with the intention of renovating and living in. If I like it, I might stay. If it makes more sense to then rent it out, I might do that as well.

The layout of the property is rubbish. I would plan to knock all the internal walls that I can (the curved one in particular) and open the back room out into the living room and have it flow out to the outdoor area. Move the kitchen as well, etc... etc...
It would be a substancial renovation if done well.

The outdoor area is on title, so I am told (yet to be confirmed by convayancer). The internal dimentions are just over 40m2, and the outdoor space is 25m2.

This is a big outdoor space for a property of this size. But I'm unsure how much value an external space like this adds to the property?
If it were just the internal dimensions for sale, then you would be looking closer to $300k I believe?
Being on title, how much freedom would I have to renovate the outdoor area?
Paving, tree removal, bbq, seating, awning etc...?

It's the wrong side of Grey street But the street is actually fairly nice, the surrounding properties are quite nice.

Thanks for any input. Excuse my long winded ranting as well.

 

[Peter_Tersteeg]

For a single person I kind of like it. The curved wall is a bit different but I think it actually gives it a little X factor. The kitchen is tight, but with plenty of bench space it works well for one person. The outdoor space makes for a great entertaining area in the summer.

It is small and it is hard to judge the right value for the property, but I think it would be a mistake to knock down walls and start moving things around. I don't think that would add any value but would probably cost quite a bit.

 

[jkat]

If you knock down the curved wall does that make this unit go from a one bedroom to a studio?

Also, if you want to change the location of the kitchen wouldn't that be 1. expensive with needing to lay plumbing for tap etc? and 2. possibly not allowed by strata?

My understanding was that with strata units any structural renovations (like moving kitchen and knocking down walls) needed to be approved so may not even be possible...?

 

[Compleks]

The outdoor area is the major draw card for me. 40squares internally is nothing special, but it has a lot of potential if the space is used well and allowed to flow into the outdoor area.

I can see this potentially as a place I could live for a while, if renovated well. My immediate ideas would take some dollars though. It could easily be freshened up with a few simple renos as well and maybe rented out again.
I'm just spitballing a few ideas though.
It's still out of my price range at the moment, and I would need to look further into just what I can and can't do in a strata titled property.

One big question though. A 40m2 apartment in this area I have seen probably for $300-310k with no outdoor area. This is a substantial extra space, but is it worth $50k?

 

[one world]

In the current market, the asking price is not too shabby. St Kilda is a sought after address these days. Wish I had bought there 20 years ago, when it was less prestigious.

What kind of yield will this property produce, I wonder? Any ideas?

 

[Compleks]

I was told that it could be rented for $350-380.
But I figure agents are usually pretty generous with their estimates when trying to sell a property.
But at $350pw, yield would be about 5%.

 

[S.T]

Looks like it was last rented for $280 a year ago

http://house.ksou.cn/rp.php?id=275356&sta=vic&q=St Kilda

I'm not sure what a valuer would value the court yard at, its' better than a balcony but still.

 

[alex9050]

You have no idea WHY you're buying the property. What do I think of it?

I think you need to reassess your desires, requirements and your motivation.

If it is an investment, then it is an investment and you should look at it from that point of view.

If it is a place for you to live then assess it from that perspective.

 

[Chris B]

It was listed for sale for $398k in August 2012 (with the same agent) and was advertised for rent for $280/wk in July 2010 and again in July 2012.

It sounds like a pretty good price for 1 bed with a car park & good size courtyard but there are definite limitations that would put me off.

Obviously it would be better if the living room opened to the courtyard but knocking down walls and major renovation is unlikely to be money well spent. The courtyard is a good size but appears to be on the south-east and will be in the shade of the building most of the time.

 

[Lil Skater]

I actually like the curved wall!

Personally I wouldn't buy a 1bd place as an investment, only so much rent and CG you can get from it.

Any works where you would look at moving/removing or adding walls will need to go through strata and moving any plumbing is very costly.

I don't think it would rent for $350pw at all, that's being VERY optimistic. $350 you'd get a much more modern and closer to the beach.

 

[Compleks]

Thanks for the replies everyone.
Property sold for $360k pretty quickly after it was listed.