Not a fan of OTP.
Pay your deposit, get a presale, developers get approval, build, then they use one of several key clauses that you wont be able to change regarding valuations or simply because they can delay it and then rescind. They have got an interest free loan off you, the give your cash back, sell the property for more and they win = you lose. Isnt that what I hear all the horror stories about or did I misinterpret that complety Im sure its not as black and white as that but you hear all these stories.
Your also in situation where if the apartment gets valued differently in future you could be in trouble.
I also am not a fan of strata fees and paying special levies etc if something breaks or is raised by the strata.
Units and OTP are just not my cup of tea.
I guess you hear what you want to hear. You are welcome to not be a fan of OTP – that is your choice.
I hear that people purchase OTP and do very nicely.
You can always hear those horror stories if that is what you want to believe.
The Universe reflects what you put in….I guess this post is a good one, coz it gives people a chance to think about what strategy suits them. And as said above it really comes down to what you personally want from investing, not all shoes fit all feet, and its great to hear why people would or wouldn't buy a certain thing. Both sides of the coin are worth knowing about.
BTW Xdrew, I used to work at Doncaster Westfield over 10 years ago, and geez that whole area has come a LONG way. It really is a mini city now. The only thing it needs – RAIL! I'd accept a light rail system too :p Having caught buses from Doncaster to Box Hill to catch a train it does need some rail. It may have changed though, it's been 10 years lol!
Cheers
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeAll good opinions,
demographics in areas will always change, either for better or worse and i think the property game has become a speculation with no certainty.
Caroline springs: 9 years ago, it was considered area where you could play in the park "etc" be close to work, start a family and know the area is like the bronks, 1 in 4 homes are for sale and the demographics have changed, high crime rate, high unemployment and junkies every where.
to say one area is good to invest know is only based on current conditions but things change so quickly that the area could change in a clickJpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
WomeninPropMelb wrote:I guess you hear what you want to hear. You are welcome to not be a fan of OTP – that is your choice.
I hear that people purchase OTP and do very nicely.
You can always hear those horror stories if that is what you want to believe.
The Universe reflects what you put in….I have a wonderful family, a great job, very handsome income, multiple investment properties and enjoy being around my friends and family. The universe has treated me very well and I put in a lot to get that (help with charities, schools, volunteer at several other events).
So if you think my opinion of OTP reflect the rest of my universe its not me that is narrow minded. All it says to me is that obviously women in property like OTP purchases? But I’m not going to jump to that conclusion I’ll just accept you have an opinion that there are good and bad stories for everything in life, including OTP and I agree with that!
Personally not a fan of OTP or Apartments in general, yet my friend who only buys apartments is currently ahead of me in equity growth
so there you go.I have looked at it, and would personally stick to boutique apartments maximum of 10 per unit block, ensure there are no mega complexes being built around the corner driving prices way down as is the case in Lane Cove/North Sydney, and close to transport, with a garage. Also no pools, elevators, gyms etc, as it usually means high strata.
If it's in a busy area, it is possible to rent the parking space and apartment seperately for an increase in income.
Out west in Sydney apartments are providing great returns for really low entry price, actually have watched them go up in value by 10-20k (10%) in a very short period of time.As for OTP, would work I suppose in a growing market, tho I prefer to buy into a 'known' market as opposed to speculating personally.
Derek wrote:Hi JP,Never bought one – probably never will.
Being OTP there will be significant financing issues you will need to consider as the vendors and their contract will require you go unconditional within 30 days (or similar) BUT the bank will not provide unconditional finance until they can value the property – and this only happens right at the end when the property is completed.
In between time you have either gone unconditional or at the very least signed a contract which you haven't been able to fulfill and are therefore at the vendors discretion to re-sell as you haven't met the terms and conditions of the contract.
Another issue is that estimations for body corporate and rates provided by the developer tend to be on the low side so the purchase of an apartment appears to be more attractive to prospective buyers. When the property is completed the strata fees, in particular, get significantly ramped upwards thus making the investment less attractive.
The value of your apartment will rise and fall with the market. There is not a lot you can do to influence the value of your investment.
Some quick ones off the top of my head.
Good points there Derek, though surprised by your opening comment – “Never bought one – probably never will.”
As I had a look at the links in your signature which seem to promote apartments. Unless you mean you never buy an apartment at full price, compared to developing/buying apartments at cost price?
About a week ago I saw on Foxtel a show called Your Money Your Call, hosted by property guru Margaret Lomas. One of her guests mentioned that 85% of apartment blocks completed since 2000, have some type of structural defects.
The three most commonly cited defects are,
1. water leaking within the building
2. internal and external cracks
3. water entering the interior of the building from outsideNo wonder strata fees are so high.
More information – http://blogs.crikey.com.au/theurbanist/2012/05/22/is-strata-title-keeping-up-with-rising-density/
It'd be interesting to see the stats on newly built houses/townhouses.
There's generally a time during handover where you go through and sort out with the builder every niggly little thing that needs repairs. The builder then organises to have these things fixed. I guess that's also where the builders warranty comes in too.
I'd think if there were glaringly obvious things that weren't fixed at the start, why not? If you can't see it until it happens, water leaks behind walls, it can't be fixed at that early stage. Even The Block had water leaks left right and centre and think of the money they threw at that!
It's buyer beware, plenty of people have been caught out when there is not enough money put aside for repairs to common property.
Great input LeonR!
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeLeonR wrote:Unless you mean you never buy an apartment at full price, compared to developing/buying apartments at cost price?This – must also state when I see the descriptor 'apartment' I automatically think small high rise. So bit of that thought process in my initial response too.
Hope that clarifies things.
so there you go.
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