Strata Title to add much value?

[staceyo]

Hi all

I have a duplex in Rockhampton, Qld, the previous owner did the firebreaks in the ceiling. So I don't think there is much to do to strata title them. I would only be doing it do hopefully increase their worth so I can pull some equity out.

But...

1. What are the financial impacts of having them on separate titles - double the rates?

2. Is it worth doing just to pull some money out?

I have never done anything like this before, so I would appreciate your thoughts.

Thanks
Stacey

 

[chilliblue]

We have a triplex and whilst all the plans and works were done ready for formal registration, the costs would have been higher to run if we were to have them as 3 seperate lots.

These are buy and hold so no intention to sell them individually.

What we did do was to seperate the water meters so that each tenant pays for own consumption.

 

[geoffw]

I've done this in Canberra. Costs (set up and continuing) can vary by state so I can't comment on that aspect. For us, it cost a little bit in surveying fees but added about 10% to the value, which allowed us to move forward.

They were already separate buildings and separately metered so nothing has to be done there.

We looked into strata titling our block of flats- 9 1br units- but icosts would have been prohibitive, as each unit would have to have been fire rated, involving works to walls and roof. Costs would also have been incurred through having to wait for all tenants to move out. I can't remember about rates- I suspect they may have gone up substantially.

 

[matto_]

This idea only just dawned on me. If you sub divide but continue to hold - potentially more costs ongoing.

Would this lead to the concept that if you want to hold both props - you would not fully strata title?

Once there is a second property on the one block - wouldnt council put up the rates anyway?

 

[Aaron_C]

Council rates would probably go up as the value of the properties as a whole increase. It all depends on how much value-add there is. If you have already done the fire-proofing then the subdivision itself will only cost a few thousand to do anyway.

 

[staceyo]

What costs are to be considered? Rates and any work to be done, ie fire breaks, separate water meters?

I only will be doing it do increase value to use the equity so I can go on to our next purchase.

Stacey

 

[Jake Milne]

I don't see why you'd strata a duplex if you don't have to?

It's a 2 unit property, you don't need strata and the difference in value between a Torrens or normal land title vs a strata title is negligible in this instance.

 

[Aaron_C]

Well obviously you'd only do the strata titling if it was worth your while (i.e. profitable). However it unlocks more than just value since it's hard(er) to get a loan for multiple dwellings on one title, regardless of how valuable the asset may be.