I have found a number of bedsitters that all fit the cashflow positive numbers but I am worried that I am buying a potential nightmare…
Thoughts ?
Steve
Hi Steve,
Bedsitters. I think you need to be comfortable with what you invest in. It depends on if you can sleep at night or are you going to always sit up and worry about the future of your Bedsitter.
You will need to do your research, on the area and recent sales to see if you being over charged.
Im not too keen on bedsitters myself, but I would probably still look into it if the numbers were right.
Where are they? City or country town?
Andrew[8D]
The are located in a city both in and outside the cbd. I am concerned over the landlord issues more than anything. Bedsitters don’t make for the best long term residents as a rule and as they are not nearby I would have use an agency to manage them which means a constant stream of reletting fees. I guess I just need to crunch the numbers a bit further an also look closely at the potential for capital rise in there value.
Steve
Hi Steve
Look at the vacancy rate and what type of tennant will be moving in. If you are worried about the agents leting fee, well thats just a fact of life, you need to add that into your numbers when you are working it all out. Unless of course you let them out yourself. My cousin does it that way, but myself, no way, I let the agent do all the hard work. When I get the bill for letting I just grin and bear it. It’s all a cost involved in the business. You just need to make sure the rental income is going to be achievable and will still be possitive after all exspenses are taken out.
Good luck anyway.
Andrew[8D]
If the floor size is less than 50sqm you will also have some additional problems obtaining finance.
Not impossible, just harder.
Cheers,
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985Hi Rally1,
Re the bedsitters. Our daughter has owned one in Sydney for over 5 years, good tenants and never untenanted.
We have a couple of mezzanine units, never untenanted, that is a mezzanine floor upstairs which is the bedroom, including builtins. They are in a large city in Queensland. The sizes are round the 50sm, mezzanine of course, extra. All cfp.
Anna
I have a number of them. All in all my family has something like 20 of them. The rule we have in buying them is never more then 8 km from the GPO in Sydney!
Minimum 12 month leases some tennants have been in them for many years. We try to rent them out to either professionals who want somewhere close to town or Uni students who we ask their parents to guarantee the payments.
Vacancy rates over the last 5 years has been one unit empty for one week! The agent charges 5% fees and they rent for 150 to 200 a week.
They have been good to us and whilst the banks don’t like lending on one they are more than happy lending on a portfolio of them with LVR of 60%
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