Strata Title Units - Help?

From: Khurram Saeed


Hi Guys and Gals
I was thinking of getting some strata title units in Melbourne. Has anyone here bought something like that before?

How does the bank feel about this sort of investment, is it catogarised as Commercial or Residential? What sort of interest rates do ou get? I have been told that the tenant pays all the outgoings...with depreciation and rent, it will be about 3-4% positively geared....with excellent capital gains.

The size are all smaller then 100SQM...average is between 45 - 50 SQM...

ANy ideas at will be helpfull...
Thanks
Khurram
 
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Reply: 1
From: Kellie Dutton


Hi

Just wanted to clarify, are you buying some units within a block or buying the entire block?? How many are we talking about?

Kellie
kdutton@smartline.com.au
 
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Reply: 2
From: Rolf Latham


Hi

You are talking of commercial strata units I suspect.

70 % lvrs are normal though sometimes you can get more and rates vary between high 6s to mid 8s.

Usually the tennant pays for all outgoings.

Ta

Rolf
 
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Reply: 1.1
From: Khurram Saeed


I am only going to buy one of them, Kelly. There are about 54 all up that are on sale. The developer who is gutting the internals of the building and rebuilding from inside, is putting in conference rooms, photo copiers, telephone services, free receptionsit and all other ammenities that an office needs, that a small sized business cannot afford...all the aprtioned will be done saving the tennat approx $40K on all that....

So Rolf, does that mean the bank will see at as a commercial deal...other then the interest rate and LVR, do the borrowing rules change if it is commercial as opposed to residential?

These units are in Camberwell...and the due diligence shows that i can certainly get 3-4% poaitively geared after rent + deperciation. the average is about $4230 per SQM...

Rolf, can i go through my normal broker to get this loan?
Thanks to all who took the time to reply.
Cheers
Khurram
 
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Reply: 1.1.1
From: Rolf Latham


Hi

You should always try your existing channels first. especially where you are happy with them.

In regard to the loans many are for relatively short periods, for example 15 years with a 5 year interest only period. But a broker that works with that stuff will do you a better deal. I do a little bit but tend not to seek it because there are people that have better connections for that type of lending than me.

I know for example that Kellie and Simon would have better commercial connectiosn than myself.

Ta
Rolf
 
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