1st time investor here,I have started looking into buying an property and not sure on house or unit/apartment atm.I met with a group called Bluewealth from Sydney over the phone and they suggested this development to me.Good location and looks pretty good but has a price tag to go with it.
Could i get some opinions on this?I know both houses and apartments have there positives and negatives but i would like to here from people without vested interests.
Hi Mike,
I am personally in favour of houses over apartments. Many factors can sway things though, and high cost in major cities can have people opt for an apartment. For investors, apartments can often bring better returns “on the surface”, but beware of Body Corp fees and high-cost Sinking Funds that can throw the good returns under a bus !!Just one thing I really wanted to share though – and that is to watch out for ‘bad dudes’ that might be wanting to sell you a lemon. First up, I have never heard of Blue Wealth, one way or the other.
If you take the warnings from in there, it should keep you alert and safe.
Benny
Sorry for the ignorance but what are high-cost Sinking Funds?
Hi Mike,
A Sinking Fund is (I believe) a separate fund set aside to cover some expected large maintenance cost into the future. It might be that the block of flats was built 50 years ago, and the Body Corp folk believe that it will cost (say) $500k to smarten up the building – rendering, etc. Thus, they might have previously voted to have each owner contribute their %age of that cost into a Sinking Fund. If your unit is one of 10 in the block, they will want $50k from you.I always thought of the Body Corp fees handling the “day-to-day stuff” – rates, insurances for common areas, maintenance, Services (lawn-mowing, gardening), etc – but it is possible that a Sinking Fund might also be part of the Body Corp fees (IDK for sure, as I have never owned a Unit). Whatever, a large Sinking Fund will need some large thought around it.
Benny
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