I have posted a couple of times and am now asking if anyone out there who is activly investing in blocks of units would like to contact me re discussion about pro and neg ideas about buying units.
I have decided this is the way to go for me for the following reasons
I can buy a lot of seperate income in one go ie 6 x rent in one deal.
This will lessen the effect if one tenant moves out I will still have 5 paying me rent.
Less land tax.
Instead of trying to buy 6 different houses I can do all the research for just one.
I know there is more maintiance but I presume it would be no more than 6 times a normal house.
I would be able to negotiate a better deal with rental agents and tradesmen as the 6 units would all be in the one address so the percentage paid out in repaires etc would be less.
I could also do a bit of work myself as I could fix a few little things on some of them without a lot of travelling around.
only the one loan from the bank so less hassels for a lot more income.
I have contacted by email a few Commercial real estate places on the Gold Coast and so far none have got back to me so I am wondering if the price I am hoping to pay is way off the mark.
ie approx $1000,000 for the 6 units,[obviously not in an expensive area.]
Has any one out there bought a block of units on the Gold Coast in the last few years?
Any ideas or comments would be appreciated and if any one would like to email me that would be great
[email protected]Still in SchoolMember@still-in-schoolJoin Date: 2003Post Count: 1,844
Commerical loans are a little harder to service, as most lenders, will only lend 70% of the intial purchase amount. Other thing to is, the loans are roughly about 2% higher too, and you have to pay alot of service fees and other related bank charges, that normally a residential property can be exempted, due to what type of loan package taken.
Best not to collateral any properties to a large investment, unless you like risk or are prepared to take on. Other than that, the bank like to review the loans every 6 months as well… so that is another thing to, to consider.
Not sure on this, but im sure that commercial/business have a maxed period of 15 years. Though, im not sure on this again.
Though im sure, one of the Mortgage Brokers on the forum, would have better knowledge and would be able to give better advice and help in this area.
s.i.swilandelMember@wilandelJoin Date: 2003Post Count: 761
We have a block of 4, and also a block of 5 units. We like units, but we have steered away from buying any with 6 as there is only one lender (NAB) that we know of anyway, who will possibly do them as residential. I believe they look at each one individually.
Commercial loans would generally turn most units to negative geared.
DelredwingParticipant@redwingJoin Date: 2003Post Count: 2,733
How about serviced Units, with you as the caretaker/manger.. which i see in the ‘serviced units’ game as being far better than an investor in the units ( caretaker/manager seems to be in a win / win situation )
Thanks for the replies
What difference does 5 or 6 make to the banks?
I bank with NAB so maybe they will lend to me as residential
Boo BoozizParticipant@zizJoin Date: 2002Post Count: 90
It makes a difference and its called profit. The bank is out to make a buck and if they can get away with differenciating the business so that you pay more they will try.
Having said that I managed to get St George to do a Portfolio loan for $1mill at %6.5 or there abouts. With no business reporting etc. So basically as a home loan and this is on a block of 7 non strated units.
Another way around the bank categorising the loan as a business loan is to find a block of units that is already strated and do loans on each individual units. The down side is the initial cost the up side is flexibility if you want to sell 1 or 2.
In the end you will need to shop around to get the best deal. DOn’t be afraid to threaten to move all your loans if they don’t play ball AND MEAN IT. Moving your finances may cost some money but in the end will be worth it as your new bank knows that if you are not happy you will simply move the loans again.
I guess what I am trying to say is don’t take any s***t from the bank they are trying to sell a product (money) and they need you as a customer.
CheersStill in SchoolMember@still-in-schoolJoin Date: 2003Post Count: 1,844
The difference between 5 and 6 is, that many banks see, that if a dwelling has more than 4 units/flats or appartments available or on the one title. They will look at it as a commercial/business loan.
“business is business”