Put off by 2nd floor - unit

Discussion in 'Property Investment - Other' started by Alex P Keaton, 10th Oct, 2009.

  1. Alex P Keaton

    Alex P Keaton Member

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    Hi

    I am enjoying myself. :)

    I have started inspecting 1 bed units 5 - 7 km from Perth.

    I will know for sure on the 15th how much ANZ will loan me. The computer says $220 K. Just waiting for official confirmation on this.

    So far I have viewed 1 property with a communal laundry asking about $210 K and another 1 bed with its own laundry/bathroom asking around $230 - @240 K.

    Have viewed 2 so far and will view another on Thursday.

    I have decided i am better off paying another $20 K or $30 K so that the bathroom is large enough for a washing machine.


    I saw a great little unit:

    - asking $230 K - $240 K
    (an unrenovated unit sold for $223 K in this unit complex last year)

    - original sale fell through due to finance (person wasnt in job long enough)
    - its currently vacant
    - in group of 20
    - 5 km to cbd
    - 51 sqm
    - renovated
    - large bathroom, plenty of space for washing machine and dryer
    - furnished
    - It was rented furnished at $265 a week


    Only problem is:

    - Its on the top floor.


    I will use the search function to check what others have to say about top floor units and the pros and cons.

    Cons
    - Tenant will have trouble carrying shopping up.
    - Furniture? Having to move furniture up there?
    - Walking up the stairs would rule out some tenants.


    Furnished
    The previous landlord rented it furnished Could that be an option for me?

    Theres advantages and disadvantages to that too. Such as having to replace items when they break/are past used by date. New oven, new washing machine etc. Is there a demand for furnished accommodation. I could offer to lease it furnished or unfurnished I guess.


    I would like to get other peoples viewpoints about buying a 2nd floor unit. Is it worth it? What about furnished ip?

    thanks :)
     
  2. Alex P Keaton

    Alex P Keaton Member

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    Forgot to say

    If this unit was on the ground or even the 1st floor I would be very tempted to put an offer on it.
     
  3. Minxdamanx

    Minxdamanx Member

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    Kim

    A lot of people like the added security of a second floor unit rather than a ground floor one.

    Did you look at the unit in the block opposite Beatty Park? I have never seen anything so tiny (and dark and smelly), so if you haven't given that one a once over, give it a miss! ;)

    A furnished second floor unit would solve the problem of tenant dragging stuff upstairs - Ikea is always good for cheap, functional furniture - and if that increases your return then that may be an option.

    I like the idea of having a bathroom big enough to include a laundry. That would be a must for me.

    All the best with your searching and I'm glad you are having fun.
     
  4. Alex P Keaton

    Alex P Keaton Member

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    Yeah thats what I have heard too

    lol no, im looking around dianella, yokine, inglewood and maybe tuart hill, joondanna.


    It is already furnished, the owner is selling it furnished. But then I wouldnt want to get stuck only being able to lease it furnished. I would also want tenants happy to lease it unfurnished. I worked out if i leased it furnished it would only cost about $20 a week to hold it if I bought it for $220 K.


    Yep definately. I have decided to go with the laundry/bathroom combo. Its a lot more convenient.

    The fact that this complex is 50 sqm means you could even hang the washing on clothes airers too if you wanted to. Thats what I do in my unit. It is 48 sqm. I have a washing machine in my bathroom and I dry my stuff in my living room.

    There arn't many 50 sqm 1 bed properties in yokine or dianella, its good when you find a complex that has them :) Looked quite spacious.


    Thanks, yes i am having lots of fun. Mum is too.
     
  5. Minxdamanx

    Minxdamanx Member

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    $20 a week to hold sounds very do-able Kim.

    Just remember things like possible interest rate rises and maintenance, though of course maintenance is less of an issue with a unit.

    Have you checked out rental vacancy rates for the area? Don't forget you probably should budget it being empty for 1 month in 12 just as a safeguard. Also remember that unless you intend to manage it yourself, that PM fees in Perth are horrendous. I'm paying 9.35% incl GST though you should be able to do better than that on a unit.

    I keep looking at villas in Yokine and Dianella - not actually going to see them, just on RE.com, but I don't know much about the area, so will have to do some more research.

    Good on you for going looking with your mum. I bet she's enjoying the time spent with you.

    All the best,
     
  6. Piston Broke

    Piston Broke Banned

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    Great!
    So tell them the truth:
    "It's not what I was looking for, but I would take it for $193k."
    "I offer you $193K* for it. Please let me know the answer asap cause I'm looking at lots of properties in the next few weeks."
    And do not say a word until the REA says "Yes, I'll do that".
    Whatever else they say, repeat the above 3 times until you get that answer.
    After that, thank them for their time and look at something else.

    Just because it's not exactly what your after, dont mean you should'nt buy it if the deal is good.

    *always subject to finance, inspections etc
     
  7. Alex P Keaton

    Alex P Keaton Member

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    Yes I have been very tempted to put an offer down.

    A few hours ago i drove around the area. Its a 3 minute walk to the bus stop and 10 minute walk to a number of shops which are on Wan.neroo rd, near the C.ape Street intersection. I am putting full stops in the words because im paranoid someone might read this haha like the agent. Its actually the unit in r.a.ymond street y.o.kine lol. Not a bad location, I think.

    But I keep coming back to the fact its on the top floor and I can picture the tenant struggling to get all their shopping inside.

    *sigh* I dont know what to do

    The vendor bought it in 2004 for $122 K.

    I was thinking, if i put an offer it would be for $220,250. The agent said he's after $230 K - $240 k. I dont think you'd have a chance at any lower than $220 K. People are snapping up these properties quickly.
     
  8. 13910

    13910 Member

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    Who cares what they are asking? Your DD should tell you what it's worth - the vendor either comes to the party once you've laid out the reasoning for that, or they don't and you keep looking. Simple.

    BTW, from my days as a tenant the top floor is awesome. Nobody living above you is fantastic. Obviously not ideal if your target tenant is 80 year old couples or similar, but if you're talking younger people it should be fine.

    Cheers
    Greg
     
  9. Kristine..

    Kristine.. Broker and Raconteur

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    Hi Kim

    Single people who live alone often prefer to not live on the ground floor

    The security factor of living on the first or second floor is better - for starters, you can sleep with the windows open, have greater privacy and a better outlook

    Plus, you are above the general noise of living on the ground floor. If I was looking to live in a flat I would go for an upstairs flat in preference to the ground floor - when I was in England last year I lived in my Sister-in-Law's second floor flat (third level) where she had lived for 34 years, and I thought it was just great! I could look out over the neighbourhood, got the breezes and felt very secure. This was important as I worked Australian hours ie all night and would be the only flat with the lights on but always felt secure. Being a stranger in a strange land this was important.

    Never mind the shopping, there were 34 steps from ground floor entrance to the front door, you just get used to balancing the load and taking things up when you're going and down on the way out.

    The strangest thing was letters being delivered through the flap in the door! Pity the poor postman, no letterboxes out the front, everything put through that flap just like you see on The Bill!

    Cheers
    Kristine
     
  10. Piston Broke

    Piston Broke Banned

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    You are negotiating against yourself. Most people do.
    I'm sure he'll also tell you your an "astute" buyer.
     
  11. jrc77

    jrc77 Member

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    As a unit dweller myself for the past eight years, I wouldn't have a problem with a 2nd floor unit. I wouldn't rent a ground floor unit however.

    Not sure if it is relevant in your case, but in my unit block there is the opportunity for top floor units to add value by extending into the roof attic space. A precedent has clearing been set in the strata minutes ...

    Regards,

    Jason
     
  12. Alex P Keaton

    Alex P Keaton Member

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    Around the $220 K mark


    cool ok
     
  13. Gools

    Gools Member

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    Kim, what would it rent for unfurnished?
     
  14. RumpledElf

    RumpledElf all fun in the big city!

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    You could always buy it, offer it for lease furnished OR unfurnished (people from out of the area love furnished houses - especially starving students) and if someone wants it unfurnished, flog off the entire contents of the house to a second hand dealer in one lot and they'll take it away. You get less for your stuff this way but at least you're guaranteed it ALL goes (except the bed, but they might dump the mattress for you).

    I have my house available unfurnished or semifurnished as I am willing to go out and buy cheap furniture for the place and throw in some of my own excess stuff. I can't tow in my car though so I think I'll be bribing some mates with beer to help. They have a Commodore and a trailer :)
     
  15. Alex P Keaton

    Alex P Keaton Member

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    about $240 a week

    Thats the other thing that is making me think twice about putting an offer.

    I was reading the furnished units threads on here and I dont like the idea/hassle of renting it furnished.

    There are a number of reasons/disadvantages for me:

    - shorter tenancy periods
    (i want a long term lease, someone that wants to stay long term)

    - The cost of repairing/replacing the furniture and the hassles that come with it


    I also know the advantages:

    Depreciation benefits, more rental income


    But to me, i would rather have a tenant who is wanting to stay long term. Thats the most important thing to me. But will the tenant find it a hassle to cart up his/her furniture to the 2nd floor??


    I could say to the vendor I'll buy it without the furniture.

    or

    I could keep the furniture already there and lease it furnished and then if i change my mind and not want to lease it furnished I could get rid of the furniture.
     
  16. Alex P Keaton

    Alex P Keaton Member

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    i have to run now

    lunch break over :)
     
  17. 13910

    13910 Member

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    Yes. They most certainly will. Just like the ******s in North Sydney where I work find fitting their beer guts in behind the wheel of their Porsche a hassle, but you know what? They're not in a hurry to sell their Porsche.

    If you're serious about getting a long term tenant, hell, even if you're not, how many times are you expecting them to move all their furniture up to the second floor? Last time I checked it was golf and rugby that got accepted as Olympic sports, not 'empty your home's contents to the ground floor then fill it back up again'.

    Again, all this comes back to DD. If you're buying in an area where you're expecting a renter in the later half of their life, then sure, carting bags up their after the weekly shop will be a problem. If you're providing a product targeted at a younger audience, then it won't be an issue...particularly if it's targeted at inner city, career orientated livers who might shop daily for what they need only for that day.

    You seem really keen to on getting caught up on a possible objection. Know what you're targeting, it either fits, or it doesn't. Would be a shame if you finally decided it does and by then someone else has swooped and taken the cake.

    Cheers
    Greg
     
  18. Alex P Keaton

    Alex P Keaton Member

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    Also forgot to add, its a 20- 25 minutes walk from tuart college too, so students could lease it, or a young single person/couple

    This property is getting more stale which means he might accept less. I am going to ring the agent in the morning and arrange to put an offer on it. I will meet him at lunch time or after work.

    In April last year he asked $209 K for it. Then renovated and put it back on the market this year for $240. I believe I will be doing well If I were to pick it up for less than $220 K. I feel it is worth about $220-$230K. So I will start with an offer of $213,350.


    What happens if I find out ANZ decide they will only lend me $200 K. Can I then get out of the contract if I have written "subject to finance" ?
     
  19. Kristine..

    Kristine.. Broker and Raconteur

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    Hi Kim

    ANZ are a very conservative lender, so if they say 'no' you will most likely be able to borrow more from another lender anyway.

    Finance Clauses in Contracts are usually generic, and it really doesn't matter which lender you put in or even how much the loan amount is for - but obviously don't be flippant about it as a contract is a legal document.

    I am often surprised to see my name put in as the lender - yeah, I wish!

    So don't stress, concentrate on making sure that you have a generous finance clause, don't promise more deposit than you have available and get the longest settlement you can

    Good luck, have fun and congratulations on giving it a go!

    Cheers
    Kristine
     
  20. Alex P Keaton

    Alex P Keaton Member

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    Yeah it would be. But it also is a great learning experience and if I were to miss out on it, it would help for the next one!

    There was a unit in inglewood I wanted to view but didnt get to because someone was able to view it in the middle of the day and I wasnt because i work full time. That was a tricky one. Tenant was very picky with his times. My appointment time was supposed to be this Thursday.

    I have just started this new job in another team in my business area and im working really long hours, im settling in and wanting to make a good impression. Its kinda hard atm.