Strata

[Guy]

Hi all,
I'm buying a block of 6 x 2brm townhouses built in 1985, brick & tile.
I'm tossing around the idea of setting them up as strata title.

Anybody know the steps I'd need to take? or any good reading on the subject?

The units are in a country town, so I'm not expecting great capital growth.

I was thinking ..... strata title.... sell one unit at 150% of my purchase price (which would still yield the new owner a 7.5% gross return)......... have the rest revalued to the price of the one that sold. This exercise would give me 20% equity, & free up the properties I used as equity to buy the units.

Any thoughts? Problems?

 

[geoffw]

I've just looked at my flock of bats in Queanbeyan- not to sell, just to get an increased valuation.

A very quick figure (ball park would be flattering) was $5000 to get plans drawn up, a few more K for council fees- but the killer for me was the $4K (approx, for 9 units) in rates- for EXACTLY the same services the council provides now (cost of block was $480K).

For the valuation, not worth it. But perhaps worth it enough to do the survey in anticipation.

But, for either selling or revaluation, I'd be doing a few quick improvements.

For me, carports instead of parking, and a render on one (or two) external walls, would improve the valuation a lot.

I'm just looking at a valuation to draw on improved equity.

My advice has been though that a valuation would not be effective just yet- prices have gone up 20% in three months, and those price rises would not be recognised by valuers until they actually start to come through as official sales figures.

I hope that's a good starting point for some ideas.

 

[Ross Sneddon]

Hi Guy

This venture could be a good idea, but do your sums.

The thing to be careful of is that if it is considered that your renovation work makes you the builder, then after selling just one unit, you could find yourself outvoted by the Body Corporate as your vote, as the builder, is reduced to one third, not one sixth.

This a peculiar part of Strata law. Check your position.

Regards

Ross