Some feedback on this 1st investment...

Hi Guys

I've just made an offer for a 2bedroom, 1 bath and 1 car space in Coogee. It's a older red brick 60s style complex of 4 floors. 76 units in two strata plans.
Car space is opened aired under the building, interior is roughly 62sqm, 12 for the car space.

Kitchen is fine, new carpet/paint and blinds. Rooms are med to large size, main with built in. Bedrooms have windows on eastern side, lounge/kitchen has window on western side.

Kitchen has space for a washer/dryer in a cupboard, fridge and washing machine but also has ext laundry

its a third floor apartment, stairs, no lifts. Complex has no pool or expensive common areas. Complex is at the end of a street, very very quite and about 250 meters to a bus station. 500meters by foot to the beach.

The exterior is ugly, but the interior is nice and modern with some value add potential. Bathroom is fine, has a bath/shower in one, seperate sink and toilet. Tiles are nice.

its location is great!!! and inside is very nice, but the exterior is down right UGLY imo. Strata rates are 400 pq. Im hoping it could rent for 380 to 410 - what do you think?

I had a last known sale report, its appreicated $55k to the price im offering (not huge in 5 years, why so??)

Thoughts, comments, suggestions. Investment place for me, i think the area make this place very rentable. I could rent it out straight away as the agent said they have everything ready to go with a 6 week settlement.

Cheers
Kris
 
based on $400 rental per week , $300 insurance, $1k in maintenance, $868 in rates, $1633 in strata but EXCLUDING management fees based on 4 weeks vacant its 4%

If its vacant for 2 weeks, its 4.11%

Im unsure what management fees are and if my other costs are correct

Got a RP data report for the street, price ive offered seems right. Most units sold 10 years ago for about $270k , so about $100k gain in 10 years. Not great?
 
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If this is your first IP, and it's all you can afford then it's all good as you now have your foot on the ladder.

But, to me, an older unit in amongst 70 odd others, with a rental yield of only 4.1% just doesn't cut it.

Limited ability to add value, no scarcity factor, no depreciation and so on.

I'm all about maximising every aspect of the investment. This property won't allow you to do that.

You can buy a house on 700+sq/m of land in Frankston north today for less than this, and the area is red hot, and will be for years.

Total control over the investment, potential to subdivide, add value, the rent return would be the same or better without too much effort.

You want to look at apartment/unit complexes of less than 20 units, and preferably with a lock-up garage, with courtyards (land content).

Withdraw the offer and keep looking.
 
If this is your first IP, and it's all you can afford then it's all good as you now have your foot on the ladder.

But, to me, an older unit in amongst 70 odd others, with a rental yield of only 4.1% just doesn't cut it.

Limited ability to add value, no scarcity factor, no depreciation and so on.

I'm all about maximising every aspect of the investment. This property won't allow you to do that.

You can buy a house on 700+sq/m of land in Frankston north today for less than this, and the area is red hot, and will be for years.

Total control over the investment, potential to subdivide, add value, the rent return would be the same or better without too much effort.

You want to look at apartment/unit complexes of less than 20 units, and preferably with a lock-up garage, with courtyards (land content).

Withdraw the offer and keep looking.

Im not insterested in anything in Frankston, but I hear what your saying. I want to buy around my area, or areas that I know.

You're right, there isn't much scope for value adding. This is about all I can afford, I was attracted to it due to having 2 bedrooms. Car space and age isn't ideal - but then new places are in Moore Park/Alexandria and theres an oversupply.

Price does appear to be good, but perhaps im rushing..

You want to look at apartment/unit complexes of less than 20 units, and preferably with a lock-up garage, with courtyards (land content).
Thanks!


The above doesn't exist for $400k in Sydney , that are new, close to city, transport.
 
im with LA-aussie on this one.
You can pay a similar price to that, and get:
1. 500-630sq.m of land
2. More potential for value adding
3. No strata fees
4. A higher rental yield
5. Capital growth that eats this coggee unit for breakfast.

....all you have to do is put aside your personal feelings and stigmas that you associate with certain areas, and give them a good thorough FISCAL evaluation.

St Marys, Blacktown, Mt Druitt in Sydney... Frankston and several other areas of Melbourne.... they are all going to appreciate in value much faster than a unit in Coogee, yet still cost you the same and return a higher rental yield.

"Land is in demand"


EDIT: correct, you cannot have what you want for under $400k... so relax your criteria to meet your budget.
There's no point saying "i want to live in a 5 bedroom mansion with waterfront on sydney harbour... but ive only got $1million to spend". It just wont happen.
 
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im with LA-aussie on this one.
You can pay a similar price to that, and get:
1. 500-630sq.m of land
2. More potential for value adding
3. No strata fees
4. A higher rental yield
5. Capital growth that eats this coggee unit for breakfast.

....all you have to do is put aside your personal feelings and stigmas that you associate with certain areas, and give them a good thorough FISCAL evaluation.

St Marys, Blacktown, Mt Druitt in Sydney... Frankston and several other areas of Melbourne.... they are all going to appreciate in value much faster than a unit in Coogee, yet still cost you the same and return a higher rental yield.

"Land is in demand"

Thanks for your reply. I can see what you mean - what if I need to move into it? Ill never live in those suburbs you've mentioned in NSW. Melb is out of the question as its simply too far away - I must be able to see/reach the property and live in it if I have to.
 
if you're looking at units... why not go for a townhouse in a suburb like Padstow?
It's not too far away from you, is still around the $300K mark, and the rental yeilds arent too bad.

We currently have a townhouse in Padstow - rental yield is around 4.2%. We used to live in it too, but my collecting of junk outgrew the garage and so we had to move out :D


May i ask why you want the fallback of being able to move into the property?
 
if you're looking at units... why not go for a townhouse in a suburb like Padstow?
It's not too far away from you, is still around the $300K mark, and the rental yeilds arent too bad.

We currently have a townhouse in Padstow - rental yield is around 4.2%. We used to live in it too, but my collecting of junk outgrew the garage and so we had to move out :D


May i ask why you want the fallback of being able to move into the property?

Ill consider places like that due to location. Its amazing what $400k buys in Penrith!

Fallback, well i dont know what will happen to my current situation and it would be handy. As a first home owner, I also need to live in it for 6months..
 
ahhh... you are going for FHOG!!
Yeah well that does limit your selections a bit doesnt it, depending on how willing you are to take a hit for 6 months and live in an area you find undesirable.
That's one of those "age-old" questions though - what price do you put on your personal lifestyle?


$400K will certainly still buy you a lot, in the right areas :)
 
Sorry, yes 1st investment/FHOG :)

Its amazing, there are really nice large family homes on big blocks!! Its just a case of travel!
 
The above doesn't exist for $400k in Sydney , that are new, close to city, transport.[/QUOTE]


No but for another $80k you can get brand new and waterfront in Homebush - rent potential $700 per week.
 
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