Purchasing property less than 50sqm

is there a risk in purchasing property that is a little less than 50qsm? There is an apartment that I am considering purchasing to live in. its about 47sqm. I know some banks might not lend for this, but are there risks for the me as the buyer?:confused:
 
Is there demand for these types of properties in the area? Your right, some banks won't lend below 50m2 - so your scope of lenders is reduced.
 
how do i find out about the types of properties that are in demand in the area? I know that the area is good- its close to work and in my price range- any further out and i'm not sure if there would be any chance of getting a good tenant. proximity to work, transport, city are great. its just the fact that its a little less than 50sqm that worries me. at this stage i am not looking into selling- just living in it and renting it out in future.

when you tell a bank how big the property is, do they include car space as part of the size?

thanks for you replies!- this is great
 
To determine what's in demand in the area from a rental perspective, talk to the property managers. A quick chat at an open house will give you a lot of info.

If it's from a future sales perspective, there's lots of demographic data out there, this may give you some tips. Otherwise, it's mostly a matter of attending lots of inspections and auctions, and getting to know the area.

Some lenders will allow a car spaces and balcony to be included in the size calculations, some won't. The section 32 should include some sort of plan which will give you this info.

You don't get to tell the banks how big it is. They either look at the section 32, or the valuer measures it up.

If it is 47 sqm, it's not too hard to get finance. A lot of lenders will consider down to 45 sqm. Below that, there are very few options, make sure you've got a finance clause if this is the case.

If you need mortgage insurance, financing it becomes even harder.
 
thanks for that advice-

-with my budget for the price of a property hovering at around 300k,being close to work and transport for me is a must. i could go further out but then i start thinking that it isn't worth it as i keep being told that it is better to stay 20km from the city. I dont know what would be the greater risk- further out in a suburb that is going to potentially grow or stay within the radius and purchase something small. and at this point, i do want to live in it so i can get the FHBG...help!
 
well- its what i've heard a lot of people say and what i have read- (but then i guess they have a used this as part of their stratergy and it has worked for them)
 
well- its what i've heard a lot of people say and what i have read- (but then i guess they have a used this as part of their stratergy and it has worked for them)

What people? Read where? Has it worked for them? Can you name a person (might be your family, friend, whatever) who said this and is actually a successful property investor?

Just because something is 'said' or you *think* you read it somewhere doesn't mean it's necessary true. Often we create these 'said' things to support our own prejudices. i.e. you can't understand why outer suburbs go up or you're not willing to live there, so you 'support' this by 'hearing' people say this to you.

Like many first time buyers, you're looking for something that *you* would want to live in. But if the aim is to own multiple properties, how many times can you do this? And after you move out, does it matter whether you want to live in it? Even if you insist on wanting the FHOG for this, you only need to live in it for 6 months. Do you really want to insist on your own requirements when you might only live in it for 6 months? When the objective, I assume, is to build wealth so you can live wherever you want?
 
so in your view, you would look into properties where there is potential capital growth - i was looking at it as a future rental. did not considered that- thanks for that :)
 
so in your view, you would look into properties where there is potential capital growth - i was looking at it as a future rental. did not considered that- thanks for that :)

No, that's not that I meant at all.

Why do you think a <20km, <50sqm apartment would be a better rental than say an outer suburb 3 bedroom house? Because you wouldn't want to live in the outer suburbs but would be willing to rent the small apartment?
 
like i said at the beginning- this is what i have heard, read and been told through books and seminar speakers- being able to rent out a place that is close to trasport and central to the city is convenient and would attacrt potential renters.

i already live in teh outer suburbs, so its not a case of not wanting to live out here-

im trying to gauge and figure out what might be the best solution for my situation.
 
im trying to gauge and figure out what might be the best solution for my situation.

What is 'best' for your situation may not be what you 'want' or are willing to accept. Your solution is either:
1) find the 'best' course of action that you'll actually be willing to go through with, or
2) change your thinking that you might accept something 'better', or at least be able to assess the differences.

Suffice to say that people have made money in outer suburbs.
 
like i said at the beginning- this is what i have heard, read and been told through books and seminar speakers- being able to rent out a place that is close to trasport and central to the city is convenient and would attacrt potential renters.

I still ask: why do you think a <50sqm <20sqm would be easier to rent than a 3 bedder 40kms out but with transport?
 
Hi apartment123,

I think along similar lines re 'within 20kms of cbd'. I believe our demographics are swaying towards more singles & couples & older retirees wanting to downsize for various reasons, than families. I think a lot of Gen Y want to stay close to the city for work & pleasure activities.

I believe transport options & certain ameneties are better closer in. I believe for a lot of these reasons & more that sustained capital growth will be more achievable in these areas.

I find there are regional areas that have had amazing CG in the past but not all of them are sustainable. Therefore I see regional as more of a gamble that I don't feel ready to tackle just yet. But I do see the growth some have experienced going regional & I would like to be in that market too someday.

This is simply what I've found true for me from my research. Others will have entirely different views.

So, chasing CG, for me inner city is less of a gamble at this stage. I know the suburbs better & feel more comfortable investing there. I would however not look at apartments under 50m as I believe CG aren't as great, onsell value not always the best & tenants more limited than for 1 & 2 brs over this size.

Hope this helps :)

Regards,
M&M
 
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