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Andrew,
You will need to do your due diligence on the rent and purchase price to ensure they are in line with the rest of the market. Check what the unexpired term on the lease is, request a copy and make your offer conditional upon the vendor securing a further 12 month term if currently periodical. The contract will be subject to finance and importantly pest/building which will allow you to have the pro’s check for termites, structural faults, dying hot water system, loose roof tiles or any expense which will adversely affect your net rental return in the 1st year.
Apart from that a more or less neutrally geared property from day one is great (as long as it appreciates in capital or rental value in due course). Broader local factors such as the economy, access to services, rental vacancy rates, employment and quality of tenants will no doubt factor in your decision.Figures stack up,
Good Luck
Hi Yoyo,
I’m a commercial leasing agent and thought I might have a go at this one.
The area of the property you are able to charge rent for is the Net Lettable Area. In a commercial situation (ie office space) the NLA as defined by the Property Council of Australia (PCA)excludes areas such as balconies, common areas etc. If you were to charge for it it would be by way of a seperate licence agreement as per signage or seating rights outside a cafe.
If you wanted to be cheeky you could possibly charge a rate besed on the total stata area or a weekly/monthly rate with no reference in the documentation to the size at all.
You’re more likely to be successful with either of these methods in smaaller tenancies as it is more common.
So whilst technically you can’t include it in the NLA it is worth noting that the space you do have will probably be more valuable by virtue of the fact that it will be “that place with the balcony”Good Luck with it
