guildford apartment

Hey all just getting into investing and been to a few inspections here and there , Today i came across one that i thought was pretty reasonable but just need a few second opinions if I'm heading the right direction.I plan to buy as a IP at first and move into it within the first 12 months for 6 months [FHOG] then move back home again,tell me what you think of this one the rental yield is what attracted me most

http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=105838948&f=0&p=10&t=res&ty=&fmt=&header=&cc=&c=71599430&s=nsw&snf=rbs&tm=1246249877

Not sure if the unit is 49 or 61 m2 but even as an older style unit it may be a little small as 2 bedrooms - studios are less than 50m2 and by modern standards 65-70m2 would be a one bedder, just be aware that the size is rather small (and reflected in the price). Return seems ok at over 5% however you should check whether the tenant is on a lease or just on holdover and may vacate at settlement. Do a thorough inspection (to check that the tenant keeps the place in order - including making sure that the stove works completely & is in a clean state).

The shared laundry would make me think twice. ie shared laundry may limit the rental demographic & mean higher vacancy rates. Just my opinion.

I can see why you are attracted - the yield is good. But there is, as they say, "no free lunch". At <50m2 there are difficulties getting finance or getting finance at decent LVR's. There are very few lenders that will do it.
Shared laundry is not a big seller as already mentioned.
You could perhaps do better.

www.propertunity.com.au
Buyer's Agents
Investigating Opportunity in Property

most importantly make sure there is money in the body corporate and the building is structually sound. You dont want to have to fork out for underpinning of footings in the future.

Though its close to Parramatta and the station it is really a tiny unit. The average stay wouldn't be long hence eating into your profit margin (if any) with the REA taking a weeks rent every new lease. Also the equivalent of  2 months rent go to rates/body corporate etc. The shared laundry may turn many people off when the rental market isnt so tight. Keep looking, plenty about........

thanks all for your opinions , you guys gave me a lot to consider ,greatly appreciated!