All Topics / The Treasure Chest / Block of unit

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  • Profile photo of fulloutfullout
    Join Date: 2003
    Post Count: 233

    May i know if any of you own a whole block of units for positive cashflow?
    Does a block of 7 units still consider a residential loan? or commercial?
    If its commercial, then the lenders will lend how many %?

    Profile photo of TruskaTruska
    Join Date: 2003
    Post Count: 20

    I own two blocks of 3 flats (under one title- as opposed to units which are held under separate titles). The bank treated both of these as residental properties for purposes of a loan. The tax office has ruled that an individual owning residential property is not considered carrying on a business (and as such the banks treat it in the same way). They used to hit you with an extra % or so above PPOR for residential investment loans, but have now in most cases decided to treat them the same.

    Both sets of flats return positive cash flows so if the price is right I would think that a block of 7 flats would probably do well. Your rates etc would be proportionately lower compared to the larger number of separate incomes. Owning units means multiple rate notices & Body Corporate fees. This make it harder to get a positive cash flow but not impossible. Mine are just breaking even now and I’ve held them for 4 years. Increased rents in that time have really helped to bridge the gap.

    I’ve only ever held average paying jobs and still managed to own 10 rentals which now gross $1500 per week. I started with a $10,000 deposit seven years ago. I think its been more through luck than anything that I’ve managed to apply most of Steve’s principles when buying property. Looking at his book has really made me realise the potential I have in my properties,and now I’m going to have a go at buying more.

    This is my first message to this forum, and I’m telling you about my properties just to help any body out there who it thinking about giving it a go realise that its possible to achieve property wealth without any special skills.

    I use one agent to look after my properties, and I’m their largest owner. As such I get priority treatment. In seven years I’ve only had one flat empty for a week and the agents deal with any/every issue that may arise. If you can afford the 6-8% and still have a fulltime job, I’d recommend using an agent.

    I’ve been reading this forum for about a week or so and am already hooked.

    Hope I’ve been a help


    Baden [:)]

    Profile photo of Elysium-MElysium-M
    Join Date: 2003
    Post Count: 259

    Good on you truska! It’s good to hear success stories.

    Hang around some more and share your experiences.


    Profile photo of wilandelwilandel
    Join Date: 2003
    Post Count: 761

    Hi Fullout,

    We own one block of 4 units, and this week settle on one block of 5 units. Both blocks are +ve cashflow.

    Re your question: The answer would be commercial finance. Stuart or Terryw or one of the other brokers would be better to answer this, however I think a lender will only lend 70% LVR. The interest rate I think would be 1% or so higher than residential rates.

    Good luck,


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