- Hi all
I came across a block of 10 * 1 bed and 2* 2 bed brick units which were built in the 1970's. All with carports near where I live. Nice area with a 500 million dollar shopping centre to be built about 3 klms away.Purchase Price $1.77 m
Rents @ 2,824.00 per week.
Council and water @ $6,000 pa
1121.00 sq metersI am yet to confirm these figures.
I can put in about $400 – $500K cash and my plan would be to buy and hold with the hope of paying them off in 10 -12 years. I also own my PPOR which I thought I would rent out at $350 pw and move into one of the 2 bed units and be the onsite care taker as I don't work.
Not having bought a large block of units before I am wondering what kind of cash reserves you would recommend and what the negatives might be. The numbers seem reasonable to me. What do you think.
Thanks for your help in advance
Cheers
Swany
Hi Swany,
The CoCR looks a bit low to me, making some broad assumptions about operating costs like insurance, maintenance etc. I'd be looking at ways that I could increase the value of the property to gain equity, and increase rents to improve CoCR…
I expect that a commercial loan would be required, rather than a normal residential loan. This may increase the interest rate a tad.
All the best,
Daedalus.
I own a couple of blocks of unit similar to the one you mention here in Brissie and they provide an excellent return and good long term CG and strata prospects.
Yes if the block is on 1 Title you will be looking at a Commercial Loan rather than a standard residential loan but the rate of interest isnt that much higher.
Richard Taylor | Australia's leading private lender
I have one unit a bit like that in Perth, we needed to do a lot of plumbing replacement due to clay pipes/root ingress, might be worth checking as replacement is expensive.
Guys, thanks for your replies.
I've been busy with other things and have not done anything further.
Thanks again
Swany
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