All Topics / Help Needed! / Slowly Acquiring all Units in small block…

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  • Profile photo of N@thanN@than
    Participant
    @n-than
    Join Date: 2010
    Post Count: 241

    Hi All…

    I currently own a unit in a small block of 3 (Triplex??). I was wondering if I could get the other two owners to sell to me would I then be able to scrap the Body Corporate?

    If I managed to buy one but the other unit holder held out on me then my body corporate payments would double I am assuming? Is body corporate necessary for 2 owners?

    Has anyone here bought property that has not been listed for sale and have any tips or traps to avoid?

    Cheers,

    Nathan

    Profile photo of CatalystCatalyst
    Participant
    @catalyst
    Join Date: 2008
    Post Count: 1,404

    I wouldn't have thought the body corp would be that expensive with only 3 units. Don't forget it covers insurance so you'd still have to pay that. What is the managing firm charging? That would be a saving. You'd have to look up the laws regarding self managing. But as they are strata'd you'd have 3 lots of rates etc. 

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Of course you could always de-strata the block after you took ownership of all units.

    Would of course have to work out if the savings on Council rates makes up for the potential increase in Building insurance premiums.

    As to whether a BC is required will depend on the State in which the property is held.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Watch out for the aggregation of stamp duty provisions too.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099

    I wouldn't "de-strata" a block of 4…it would be a costly exercise + inflexible if you needed to sell + adjust to the market.

    Given you have majority rule, you could choose you own strata manager OR self manage, but it will still be under a strata scheme ( insurance wise and council wise) – nothing wrong with self managing. 

    Regards

    Michael 

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
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    Profile photo of Andrew_AAndrew_A
    Participant
    @andrew_a
    Join Date: 2003
    Post Count: 392

    Often I find that the expensive strata fees are mostly from high admin costs, and not sinking fund contributions, nobody takes an interest in who is managing and they pay whatever is put in front of them, so taking an interest is the first step in managing your fees. Would expect the costs should be reasonable for a block of three with no pool.

    Profile photo of N@thanN@than
    Participant
    @n-than
    Join Date: 2010
    Post Count: 241

    Thanks for the replies! The strata fee's aren't too bad… between $2000 and $3000 pa, considering it has a gross yield of nearly 10% I shouldn't really be complaining.

    I guess I was just curious as to whether it is a stupid idea to go the opposite way to the norm of Buying a block of units, strata title them and sell or revalue to add instant equity.

    Everyone has given me something to think about/look into anyway.

    Cheers,

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