hi all
im from melb, looking at one bedroom investments in the heart of the city.
prop investment details as follows
312,000, 3 yr guarantee rent of 251 wk.
this propert was brought to my attention through a $200 a day seminar that included the site visits of the property, i think they expected me to sign on the day, but of course i didnt.(seminar was run by a mob called westpoint)
what are yre thoughts of city investments, should i just invest elsewhere.
still looking for me first investment.
thanks in advance
westpoint have some adverse publicity – strong sales pitches etc. Once again though, like all property deals, the main thing is to make sure the deal stacks up for you. Do your own rental assessment to see what you will get in 3 years time when the guarantee expires. What are other apartments around this one selling for?
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The rent obviously is reflected in the purchase price.
I don’t know Melbourne but if you were serious about buying then I suggest you either check out the correct rental value for the unit or pay a valuer (independent from the seller) to tell you both the value of the unit as well as the rental value.
If it happens (as I suspect) that the selling price and the proposed rental is inflated then your expense for the valuation will have been a good investment.
Pisces
Hi Pousti,
As Pisces has already indicated guaranteed rentals are largely built into the purchasing price and often are higher then market rent.
As such this can make the cashflow situation somewhat rosier than reality.
Definitely do you own research and check out the floor size of the apartment/unit. Some banks have been reviewing their lending rules for apartments due to their increased risk with a softening of the inner city unit market and you may not be able to secure an 80% lend.
Other things to consider are how many other units are there in the building, how many other units in the area, how many are planned and what are the vacancy rates in the other buildings too. Some developers are offering rent guarantees so they can move their product.
Derek
Plus the rent is still less than a 5% return. I wouldn’t touch that! Especially not a guaranteed rental.
Cheers
MelHere is another bit of caution.
Most of the lenders depend on the mortgage insurer accepting the security.
If it is a city building and also if there are a lot of units in the building the insurer will only accept a certain amount of risk @ say 80%, then another lot at say 70% LVR and thence it may reduce to say 60% LVR.
Also they will not lend on more than a certain number of units.
So if one wants to buy a city unit make sure that you obtain finance approval before signing on the dotted line (or make sure the contract has a clause in it ‘subject to finance’)
Pisces
Hi Pousti,
Some lenders will only allow up to 60% of the rental income on Inner City apartments 3000 – 3010 Post Codes,
Keep in mind, if it is a Serviced apartment with floor space up to 50 meters the max LVR may be 50% and the rental income could be reduced to 40%
Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:1800 820 500
VictoriaPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
Pousti,
That price is expensive in inner-city melbourne. Check out domain.com.au. There are hundreds of apartments there for under $200k in the middlec of the city. There are also rental guarantees there- the student apartment niche. Don´t pay too much when there is so much to choose from.
kay henry
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