Strata

From: Buzz .


It was mentioned at the recent Syd Freestylers that one investment strategy is too buy a block of units and strata them. Sounds easy but what does this really mean and how easy is it to get through council?


"To infinity and beyond"
 
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W

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Reply: 1
From: Empy 555


It sounds great !

However first you must acquire the sites.

There are many many blocks of units on one title out in the market place.

If you are able to find them and obtain them ahead of other developers this can be well and good.

However there is a maze of council requirements you have to meet.

Also you have a lot of renovations to do to meet fire proofing and strata requirements.

Essentially you need to renovate every unit.

Additionally some councils are on to developers that want to strata sell and exit.

So to restrict good old capatilism they decide that you must maintain x number of units and not on sell them for a period of time.

They also may decide that you have to offer a certain number of units at below market rent to offset the housing issues.

At the end of the day it all can be done and there can be a lot of profit made.

usually its the larger unit numbers of say 15 plus where you can make significant money.

But remember you need good cash flow and capital to pull off these developments.
 
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Reply: 2
From: Jas



> From: "Buzz ." <jmss3@yahoo.co.uk>
>
> It was mentioned at the recent Syd Freestylers that one investment
> strategy is too buy a block of units and strata them. Sounds easy but
what
> does this really mean and how easy is it to get through council?
>

The other issue is (for NSW) a new housing plan for low income earners.
All new strata developments have to have a number set aside for low
income renters. You must place a caveat on the title, restricting
rental levels for a number of years (three, I believe). This is
relatively new, so I'm not sure whether Ross has come up against it
yet...


Jas
 
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Sim

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Reply: 2.1
From: Sim' Hampel


Isn't that a rather inelegant and unworkable solution to the public housing problems ?

How do they work out how low they need to set the rent ?

A new unit block on the harbour renting at an average of $1250 per week, do they need to keep a couple renting at $100 per week ? Is this an opportunity to get some cheap rent harbourside ?

I know nothing of the legislation (heard a rumour about it though) - anyone know how it actually works ?

 
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Reply: 2.1.1
From: Jas



>From: "Sim' Hampel" <sim@hampel.com.au>
>
>A new unit block on the harbour renting at an average of $1250 per week, do
>they need to keep a couple renting at $100 per week ? Is this an
>opportunity to get some cheap rent harbourside ?

I'm not sure of the relevant legistion, but it would make sense that they
include a cap on income for tennants

Jas


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Reply: 2.1.1.1
From: Buzz .


Thanks guys - I appreciate the info - will crunch the numbers though and see what council restrictions are on the the rental limit - sounds like it could kill the deal.

"To Infinity and Beyond"
 
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