Residential Property on Industrial Zoned Land

[eternit]

Hi,

I was wondering what are the negatives in buying Residential property on Industrial Zoned Land?

I am looking at buying a property on Industrial zoned land which has a house and block of flats on it.

I talked to the council and they said if the property is demolished then it would be unlikely to get approval again for the residential property to built on the land.

Apart from that what other advantages are there?

Thanks.

 

[Propertunity]

I talked to the council and they said if the property is demolished then it would be unlikely to get approval again for the residential property to built on the land.
Apart from that what other advantages are there?

Also this may/will be the same if there was a fire for instance - they may not let you rebuild.

Apart from that, there will be now or in the future, the noise and fumes from industry that moves in. Fibreglass manufacturing people (fumes), car repairers (late night noise), painters (fumes again) etc.

 

[Player]

How big is the block?
Is the area over-serviced by way of industry there? Are there many vacnt industrial properties for lease?
What would the demand be for another shed or two, or self storage units, etc., etc?
Are the resi dwellings on it now fuly tenanted?
At what yield?
Is that return OK for you?

This may be an opportunity in disguise.......safe vanilla resi IP's for now and bearing on the answers to the questions I've posed above (by no means exhaustive), the dirt may be more valuable as industrial zoning for the future.

You would obviously need to be comfortable with (likely lower initial) yield versus future upside. I would go to council and find out what could be put on it in the event of fire/demolition and see how that fits in with you current and future portoflio goals.

 

[eternit]

How big is the block?

The block is approx 3000m2

Is the area over-serviced by way of industry there? Are there many vacnt industrial properties for lease?

Its not really overserviced by industry. There are few sheds , dental centre and petrol station surronding the block.

What would the demand be for another shed or two, or self storage units, etc., etc?

I cant put more units on it as the land is industrial zoned but generally the demand is there for resi in the area.

Are the resi dwellings on it now fuly tenanted?

Currently the entire block is vacant to make it easier to sell .

At what yield?

Currently looking at a gross yield of ~ 11% being very conservative wit h clean up and very basic cosmetic reno.

Is that return OK for you?

The return is ok for me but it seems after talking to a few lenders I will have to go with commercial loan which will not work for me....

 

[Rolf Latham]

AS you have already hinted, the finance will be cruel .

Comm in the current environment is a tough gig, with silly LVRs

ta
rolf

 

[Aaron Sice]

interesting if you could acquire it.

 

[fernfurn]

Pardon my crassness, but brothels go well in industrial areas. (Not that I know from first hand experience, but used to do fit out for commercial furniture so have seen a few in these areas)

 

[eggnog]

hahahha. speaking of brothels, just had an email alert of a brothel for sale in clontarf (up towards sunshine coast way). asking price $1.5M. Lease term 5+5+5 years.


http://www.realcommercial.com.au/cgi-bin/rsearch?a=o&id=5561021&rsf=emailalert-propdetails

 

[Cashflow]

Is there any way you can make the finance work?

If the problem is a larger deposit why not look for a partner?

If you can carry out cosmetic work and have it tenanted with a view to developing further down the track it could work out to be very profitable!

Is there room for any other buildings - sheds/storage - visit council and see what you can add.

Can the house be rented out to medical practitioners - doctors, dentists, optometrist etc - especially if you can provide off street parking. If so you can sign them up on a long lease which will help buffer you against tenants that may come and go in the units. This will also help with your lending as a long stable tenant is gold!

Just a few things to think about - let us know what you decide.

Peter
www.cashflowcalculators.com.au
www.privaterealestate.net.au