Hi all,
After researching property investing for a few months there are a couple of things i am still unsure of:
– when investing in a unit, would body corporate normally undertake all the roles of a property manager (finding tenants, etc) or would you need an outside agent to act as a property manager also?;
– i have come across a few units lately advertising a nett % return. Is this amount generally only taking into account gross rent return less body corporate?…i know there is a lot more to consider but would 9% nett generally be typical/good/otherwise?
Any response would be greatly appreciated!
Thanks in advance.
Matt [
]The body corporate’s role is only to “run” the building. That is, get the lawns mowed, keep the books, pay common property insurance, etc. What happens in each unit is the owner’s responsibility.
This means that you need to hire your own property manager to find and manage tenants, or do it yourself (risky if you’re inexperienced).
The body corporate’s costs are reflected in the quarterly (at least in WA) strata levies that each unit owner has to pay.
I’d be a bit careful about accepting advertised claims on nett return – you need to work out all the expenses and work out a realistic rent you can get from the property, and compare this to the total cost of buying the unit (ie including stamp duty on the unit and the mortgage, bank & settlement fees, etc), in order to calculate your true rate of return.
Steve’s book has some simple tables and diagrams to help you work this out.
Cheers
M
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