Hi All,
Just need some help.
Im looking at purchasing a apartment located in Docklands VIC for investment purposes. My question is that there seems to be a lot of apartment blocks in this building complex currently on sale at the moment. I'm thinking it might be due to some sort of increase in the body corp or maintenance works coming up and people are deciding to sell.
My question is, what is the best way I can confirm what going on? ask the real estate agent (not sure if they will want to let me know)?Thanks in Advance guys!
1. ask agent – they legally can’t lie…but they will sure “fluff it up”- they will make a funeral seem like a party!!
2. Ask for sale contract- there could be certain development control in the area that could affect the price
3. go to the building and have a chat with the building tenants /owners- ask them what they think of the place? noise problem? plmubing problem? etc…. Local knowledge is king!! my last few IP i bought; i would literally go down to the nearest coffee shop or Pub and have a chat with the local.
4. Get a strata report- will cost ya!
5. Look at how much the strata is and compare to another building based on size.Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Thanks Shape. Very helpful
In additional to Michael's valid points I would do a search of the Body Corporate records and have a look at the last AGM Minutes to see whether there was any provision for an increase to come into effect or whether any scheduled work is set down.
Also look at the Sinking Fund Anlaysis and see how much is in the kitty and what is to be spent.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
thanks Richard
Within a period of the first five years of a buildings creation .. there is a reasonable exchange of units. There is usually a brief exchange of up to 30% of the building within the first two years as people who got in for certain reasons realise they cannot manage or support the loan they thought they could handle. Or they find that the investment is taking a little longer than it should for doing anything for them.
Thats the rapid exchange .. thats actually quite a normal procedure in most new buildings.
However .. in Docklands .. there are a heap of poorly built .. badly managed .. rentals and semi-owner occupiers that really arent attractive to anyone once the initial purchase has been propertly assessed. At the moment the big movements in a lot of the buildings is the fact that student vacancies and student share has eliminated a good 20% of all existing tenancies in these complexes. And the owners corporation contributions can be quite high.
Stand back and do a proper assessment of the property as a genuine investment. There may be a series of genuine reasons why people are leaving.
xdrew,
Thanks for your input on this. Very helpful
For future reference
You are entitled, by law, to request to view the owners corporation records such as minutes and financial statements. They Owners Corporation manager must provide this if requested. As detailed above, always obtain this information prior to purchasing as it may even give you negotiation power to reduce the price if the investment is viable.
Honey Owners Corporation Management – http://www.honeyocm.com.au – Owners Corporation (Body Corporate) manager for Melbourne, Geelong, Ballarat and Western Suburbs region.
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