All Topics / Help Needed! / What’s your take on this?

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  • Profile photo of FireCaesarFireCaesar
    Member
    @firecaesar
    Join Date: 2004
    Post Count: 71

    I’ve just received an email and will like your views on this:

    xxxx is the closest student accommodation to xxx school. The building is 6 years old and still in excellent condition.

    The best unit in the block that I have listed is 1504. It is 21 sqm. in size and has great views. I have just had a contract ‘fall over’ there due to finance. It is listed at $130,000 and the vendor would take $125,500. It is currently rented at $235.00 per week. Other ‘C” type units I would recommend are xxx ($120,000) and xxx ($125,000). They are the largest size – 21 sqm. They are at the back of the building which is quieter and cooler. They are both fully- furnished with a kitchen unit and ensuite. They have three windows and a ceiling fan and are cool in summer and warm in winter. Unit xxx has no western afternoon sun in summer. These units are priced for sale with little room for negotiation. I have just sold xxx (‘C’ type) for $127,500.

    I also recommend xxx, a ‘B’ type (19 sqm) with views listed for $130,000. This is overpriced but I sold xxx recently for $118,000 and the vendor might take the same price. There has been much interest in xxx this year as the rental returns are so good for inner-city xxx. I also have another “B” type, xxx with an outlook for $120,000. This is a brand new listing.

    I also have unit xxx, this is an A type – 18sqm, unit for $110,000. Although this unit is the smaller type, it has great views of xxx.

    The body corporate fees here plus the rates are close to $3,000 per annum. For 712 the body corporate fees are $1682.20 per annum and the BCC Rates are $1080 per annum. As I only listed 1413 on Friday last week I haven’t been given the rates notice yet but it should be almost the same as 712. The body corporate for 1413 is $1551.49 per annum. The occupancy rate is 98%. The management fee for rental collection etc is 8%.

    There are three other charges involved if you rent the unit to a tenant and these are, telephone line rental – $140.00 per annum, electricity – $15.90 per month, and cleaning fees when necessary. The tenants can hire a car space if they need one.



    Are the units worthy of consideration?

    Profile photo of FireCaesarFireCaesar
    Member
    @firecaesar
    Join Date: 2004
    Post Count: 71

    Guys, I would love to have your views on this one. Especially:

    It is listed at $130,000 and the vendor would take $125,500. It is currently rented at $235.00 per week.

    What do you think?

    Profile photo of richmondrichmond
    Participant
    @richmond
    Join Date: 2003
    Post Count: 831

    21 sqm is TINY. That’s smaller than a lot of hotel rooms.

    Wouldn’t touch it personally, but it’s horses for courses.
    cheers
    r

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544
    Originally posted by FireCaesar:

    It is listed at $130,000 and the vendor would take $125,500. It is currently rented at $235.00 per week.

    As Richmond has already indicated a unit this small is considered high risk by lenders and as such they will not lend at 80% on anything this small. Because of this you will find that more seasoned investors will tend to steer clear of these (unless they fit a special need) and therefore long term growth is questionable and capacity to sell of quickly limited.

    If the advertisement indicates the vendor is willing to take $125500 and you see a purpose for the investment then offer less than this. Even if the vendor says they will take this price – they still have to find someone willing to pay it. Start negotiations with a lower figure.

    Derek
    [email protected]

    Property Investment Support Available. Ongoing and never stopping.

    Profile photo of mummum
    Member
    @mum
    Join Date: 2004
    Post Count: 104

    Derek has covered most of the reasons I wouldn’t consider it.

    Before you go further, you should check if finance is possible and at what rate and LVR. Most places would start at about 40 sqm for a residential loan. Many won’t touch anything as small as 21 sqm on a residential loan.

    Margaret Wilson
    [email protected]

    Profile photo of Robbie BRobbie B
    Member
    @robbie-b
    Join Date: 2004
    Post Count: 2,493

    You can get 80% LVR and possibly more if you have other property and cross-collateralise. It sounds like a hotel conversion to me.

    Find a good mortgage adviser to help you through.

    Robert Bou-Hamdan
    Mortgage Adviser

    M: 0414 347 771
    E: [email protected]
    W: http://www.mortgagepackaging.com.au

    Comments made are of a general nature and should not be construed as individual advice.

    © 2004 Mortgage Packaging Pty Ltd

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