As I’m searching for my IP in Brisbane I’ve come across many nice properties within complex’s. Their body corporate Fees bite into profits taking about $2250pa, in saying that, the majority of them are under 10 yrs old, very neat + tidy – wont have to put up with gardens/trees etc, more rent (pays for bc fees), most have security gates etc. So does anyone own one as an IP, would you consider buying one? If not – why not etc.
Thanks![strum]
Hi Phorsha,
I do not personally own an IP in complex’s, however I did a bit of research into properties in complex’s in Brisbane and also Cairns, because of the high gross returns. However, like you said body corporate, maintenance (e.g. grass, pool, spa’s etc..) make the property negative or neutrally geared!
Anyway, I had a friend buy an IP in a complex in Brisbane 2 years ago and they have experienced NO capital growth over that time. Therefore, if the property does not experience capital growth and the property is only just positively geared if the unit is vacant for a couple of weeks then you will make a loss which no/little chance of regaining your money! Depending on how large your depreciation schedule is every year.
Also, many complex’s like these don’t let you live in the unit either so if you wanted to move to Brisbane and live in it for a while as part of a holiday or for work then you wouldn’t be able to.
In conclusion, unless the returns are >>10% I would probably stay clear of them. Especially when you consider that interest rates are likely to keep climbing, you need to find properties that have a reasonable return (~6%) and will apprecate at a good rate!
Hope this helps!
[suave2]
Hi Phorsha,
In my opinion i wouldnt buy in complexes, basically because of the high fees that come along with it, also, as mentioned above you dont get much CG, as i think the real CG is in the mud (land) that your IP is on, therefore i think money can be better spent else where.[suave]
Cheers guys, that pretty much says it all!
Means more work finiding a decent place but i’m sure will pay off better in the long term.
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