Villa Unit VS houses and apartments

[feimao0724]

Hi Guys,

Just a question on villa unit, i understand that a villa unit is an semi-detached house, and you don't own the common area such as stairwells, driveways and gardens. but my question is do I own the land where the property is standing on ? somebody told me that the land is under my name but i don't actually own it? what's the difference between land under my name and owning it ??

Also, compare to apartments , what's the adv and disadv of a villa unit? does villa unit have a higher capital growth potential than apartments in general ? or the opposite applies?

Comments welcome, many thanks.

 

[Bill.L]

Hi,

As someone who has never bought anything but houses and land, I really don't have a clue!!

However..

but my question is do I own the land where the property is standing on

.... can I suggest you look at the title to see what it says? That alone should answer your question.

bye

 

[feimao0724]

Sorry Bill, I am really new to this area, could you give me a more clear answer for the question? do you imply that the answer is yes, i do own the land?

Moreover, If I would like to tear down the property later on and rebuild a new one, (I wouldn't touch the shared wall which is part of garage), Am i free to do so subject to approvel from council?

Thanks

 

[Bill.L]

Hi,

c

Could you give me a more clear answer for the question? do you imply that the answer is yes, i do own the land?

Umm, my initial response was.........

look at the title to see what it says

I don't know how to be more clear, sorry. The title will tell you.

bye

 

[Rockstar]

You own the title to the property but are bound by the strata body corporate laws as to what you can do to the property. ie: you may be able to paint the inside of the house but you may not be able to do any external changes without consent from the BC. Each set up can vary so you need to get your solicitor to read the documents and explain them to you. Otherwise you can interpret them yourself. I have set up one before and am in the process of setting up my second. I try to set them up to give maximum flexibility and independance to the owner to have maximum control over their property. Saying this, I have not done any attached units which would be more restrictive.

 

[josko]

I think sometimes we forget what it's like to be new to property:

The title is the document you sign when you purchase the property. If you haven't yet purchased the unit/villa then you won't have a title to the property.

It is more or less the document you need for you to be able to own the unit/ house/land etc and therefore stated who owns the unit/house/land.

However, this document won't tell you what you can do to the property as Rockstar explains.

If you are interested in a strata property you will need to obtain a Body Corporate Disclosure.

If you have trouble interpretting this document, get your Solicitor to look through it for you, as Rockstar explains.

Regards JO

 

[feimao0724]

Thanks guys. They are really helpful!!

I got a copy of section 32 today from REA and read through it. it contains the body corparate certificate, but it didn't specify if I can do renovations inside the property( leave the outside untouched). I would like to put a wall in the middle of the living room as it is quite large to form a new room, am i free to do that given it's inside the property and wouldn't affect others?

It seems the villa has quite a few restrictions, so is it a good buy in terms of capital growth in general or should I switch to apartments?

thanks a lot~~~~~

 

[Chatto]

There are a lot of rules with villas to keep a uniform appearance on the outside and keep tenants in check.
Remember your going to have to pay body corp fees every quarter as well.
The up side to this is it is a pool of funds from everyone to keep the common property up to date.

 

[Gigantor]

villas..

Hey Feima,

I recently bought my first property, its a villa unit in melbournes inner north. I looked at properties for ages (well over a year) tosssing up apartments vs villas etc, villas always came up on top for me if you can afford them.

I found that (depending on the block of course)
- villas are easier to get things done renovation wise, and more flexible.
- you tend to get larger properties (m2) than equivalently located/priced apartments
- you are much more likely to get some kind of private backyard or courtyard.
- (in my case) they often have things like seperate laundry and seperate toilet, rather than having those in the bathroom as some similarly priced apartments do.
- usually less units in the block
- often a private garage or carspace is right outside the unit

Restrictions on the uniformity of the external look of the property is not really a bad thing - it wouldnt be good for values if everybody in a small unit block painted them different colours or something would it?

Check the body corporate rules, but if they use the basic owners corporation template, you are free to do pretty much whatever inside your property as long as it dosen't affect anybody else, and external as long as its going to "blend in"

I also think that practically, its easier to get things done like trades etc when its single floor villas as opposed to multi level blocks of flats or apartments, and as I said earlier the better interior spaces & prospect of courtyards/backyards give more scope for improvement. They are like mini houses

 

[gldsaucer]

you might also want to know how flexible are the owner corp with regards to minor exterior alterations..By minor, I am talking about something like if you are to change 1 of your bathroom window glass from clear to frosted..

 

[feimao0724]

Hey Gigantor,

Very interesting indeed. you make me feel like placing an offer. Thanks for sharing.


My major concern is from a capital growth perspective. having said that, the land component would be of particular importance. as we all know, apartments don't own land whereas villa does (although there are great restrictions on how you can use the land ). I would thought with same priced villa and apartment( similar condition, or even the villa is bit older), the villa will have higher value than apartments in the long term. but i need some guru to verify my point.

to gldsaucer, I have got some advice from the agent, they said to me it should be alright if you still keep overall appearance the same.

 

[Ms Jade]

...My major concern is from a capital growth perspective. having said that, the land component would be of particular importance. as we all know, apartments don't own land whereas villa does (although there are great restrictions on how you can use the land ). I would thought with same priced villa and apartment( similar condition, or even the villa is bit older), the villa will have higher value than apartments in the long term. but i need some guru to verify my point.

Certainly not a guru but I would say definitely a plus having the villa (in the same area) from a CG perspective. You're on the right track.

 

[Chatto]

Dont listen to the RE Agent!!! Find out.

 

[Gigantor]

land value

Hey Feima,

Dont quote me on this, and always double check with your conveyancer or solicitor etc, but the way I understood it, is that with apartments each apartment owner owns a share in the land.. so working out actual land value for your property is hard.

With Villas its easier, because they are more like a townhouse. you have your own unit, sitting on x m2 and there are no multiple floors to confuse things.

 

[The Y-man]

Other advantage of villas over aprtments: usually fewer members in the owners corp to lobby. Much easier to get changes/decision through say a block of 4~6 than a aprtment block with 100 owners....

Cheers,

The Y-man

 

[Savanna100]

In strata title, you own everything inside the inside face of the external walls, if that makes sense, the body corporate owns the whole of the land, generally under Torrens title and the structures are then strata titled in the way I described above. The body corporate owns all the common property and and the external shell of the structures.

I hope that helps.

 

[BayView]

Hi Guys,

Just a question on villa unit, i understand that a villa unit is an semi-detached house, and you don't own the common area such as stairwells, driveways and gardens. but my question is do I own the land where the property is standing on ? somebody told me that the land is under my name but i don't actually own it? what's the difference between land under my name and owning it ??

Also, compare to apartments , what's the adv and disadv of a villa unit? does villa unit have a higher capital growth potential than apartments in general ? or the opposite applies?

Comments welcome, many thanks.

You own a percentage of the land that the complex is built on, and the building on that land.

The lot size of your land will be on the title.

There is no general pattern which says a villa unit or an apartment or a house are better investments.

For example; we own both a 3 x 1 house on a separate block of land, and a 2 x 1 villa unit in a complex of 4 in Kalgoorlie. The unit has a courtyard.

They were bought about 2 months apart back in 2003. The unit was $105k, the house was $151k.

At the last Bank valuation in Nov last year, they were valued at:

unit - $220k
house - $300k.

Much the same; slightly better for the unit, but it is in a better spot than the house.

As a parallel; our PPoR was purchased in 2000 for $305k, and was valued at the same time (Nov) as these two mentioned for $650k. The PPoR is on a 1/3rd of an acre with terrific bayviews.

So, which was the best investment out of these 3 particular properties over that period?

Basically no difference, but the PPoR with the bayviews has the bigger potential.

The disadvantage of a villa unit or apartment is the Body Corp fees.

We have 2 villa units - both with body corp, so this is a "con". It's a tax deductible expense, but still an expense .

The "pro" is that they are generally cheap to buy, the rent returns are usually not too bad, and if you buy in smaller complexes - less than say 12, they do well for cap gain.

This is good for the newbies, and I would recommend these as a first up investment, and make sure it is built after 1987 to maximise the depreciation for the tax return.

I would not buy any more of these now as we have "moved up the ladder" a little bit, but our villas have served us very well, and provided us with the opportunity to move up.

If you can afford to spend a little more, a house on a good sized block of land with future subdivision prospects is better as you can increase your return down the track, but the rental yield may not be as good, so the holding costs until you can realise that increase in returns may be harder to cope with.

I think this is a "higher up the ladder" step for most, and something to plan towards.

 

[feimao0724]

Thanks guys, that really helps. this is our first IP, so at this stage, by considering our budget, we probably will buy an villa in a relative good location and hopefully the rental yield is good as what Bayview said.

 

[TasInvestor]

Go with the Villa, esp. if you can get 3 Bdr - more like a house, and can get families (and retires as well).
Villas do tend to go up more than units (all things being equal, which they never are...).

Also can do more with Villas (renos, carports, etc - just need Body Corp consent which should always be easier than a body corp with 60+ unit owners. Fees can also be less and there is less chance of being hit up for things like concrete cancer in units....