It is not regulated – just like the REA selling – it is whatever the BA and you can agree on. Some charge a fixed fee – which I think is better. Some charge a % of the purchase price. Some charge a % of the saving they get you off list price. As a guide you might expect to pay 2% or less of the purchase price but really I prefer a fixed fee, otherwise there is no incentive to get the price as low as possible.

The problem you are going to have with 1brm studios is one of financing them. If <50m2 it can be done but there are a limited number of lenders who firstly will do it and secondly will do it at a decent LVR.
Depending where the studios are, they will do OK with CG – but this is dependant on location and the (large) management fees involoved with studios which are commonly in a rental pool.

Your strategy of accumlating property now and providing for your retirement is a good one. If you choose well, in a high rental demand area, you should not be concerned with having much vacancy at all. It all comes down to good selection criteria.

Hi Shaun,
Most property investors are average people on average incomes.
Can I suggest you also pick up a copy (or subscribe) to API (Australian Property Investor) magazine? There are lots of articles every month on how average people do it.

Ultimately you should look to doing both. When you start off (and congratulations for making the decision to do so), you tend to be overbalanced into one or the other – i.e. you get keen on property and end up with 5 x IPs and no shares. Then it is time to rebalance and buy shares too.

I agree with Scott. Units at the front can be subject to road noise and other owners cars coming and going from the complex.
It all depends on the block itself. Some blocks are in quiet streets but the rear units back onto railway lines and therefore are worth less than the front ones.

Top floor units sell for more than mid-floor or ground floor. So there are many more factors to consider including the number of bedrooms (many blocks have a mix of 1brm, 2 & 3 brm units) and floor area.

Other considerations are that in the one complex they may be 0 car spaces for some, outdoor car spaces or carports for others and LUG's for some others. All these have a bearing.

At the risk of sound a little self-serving, many property investors when buying interstate, engage the services of a Buyers Agent to help them. You have to weigh up the cost of their fees Vs your own air travel, car hire, meals & accom for yourself to do a few trips to your intended destination and be in the right place at the right time.

Since you have not settled on the properties, it is the owner's problem. Get him to fix it / sort it out, before settlement – and delay settling until it is sorted. The property must be delivered to you in essentially the same condition as it was when you inspected it and offered to buy it (excluding those items on the inclusions/exclusions list in the contract of sale).

Chippendale is fine – close to the CBD etc and good CG. Be wary of buying 1brm studio's though.

We buy a lot of these types of dual income properties for our investor clients. Generally speaking the kinds of yields are between 7 > 8% or a fraction more.
HOWEVER, this yield cannot be used as the basis of valuing the property.

That is often how commercial property is valued – on a cap rate. But residential property is valued on a "comparable sales" basis. i.e. similar properties that have recently sold.

I think you'll find the answers you are looking for in this document (if you are in NSW): http://www.planning.nsw.gov.au/plansforaction/pdf/Affordable%20Housing_Fact_Granny%20Flats.pdf