Hi all,
I was wondering if anyone here invests in inner city apartments. I understand that some see this as lower CG due to the fact that there are a lot of flats in the same building but what about only the top few floors or even the penthouses?
I asssume that they would be considered unique and in some ways scarce. I assume that body corp cost will have to be taken into account, but there should be less maintenance costs. Are rental yields higher than houses? The target market would be young single/couple yuppies which I hear are increasing in numbers.
I also note that improvements aren’t really possible but are there any other ads or disadvantages people can see.
Is this a viable alternative investment area?
Thanks Josh
Hi Josh,
I would recommend you read this thread https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=9054 as the long term implications of these developments will (in my opinion impact on most apartment buyers across the eastern seaboard)
Apartments tend to have higher body corporate costs due to lifts, pools etc that are included with the property. Additionally rates tend to be on the highish side and as such there are a number of rental weeks consumed meeting these ongoing costs.
Cmpounding these issues is ‘press’ indicating that there are significant vacancy rates in many of the inner city apartment blocks.
Penthouses (top floors) do have a higher entry level cost, which is partially offset by a higher rent but I believe the overriding issues are the ongoing costs and the current highish vacancy rates.
Long term statistics demonstrate a clear decrease in family size so there may be some long term grwoth advantages – if you can hold in the short term.
Derek
[email protected]Read my comments? Think I can help you? PM or email welcome.
Thanks Derek,
I don’t have too big a problem with the higher LVR as I was looking to go towards neutral gearing or positive cashflow since I believe that Cash is king.
The main thinkg I’m wondering about is that since rates and BC are higher is this in some way offset by lower maintenance costs (ie for gardens and aprtments tend to be niwer)
How does the CG compare to houses. With the high vacancy rates are the penthouses etc more susceptable or immune due to their unique factor?
Thanks Josh
Hey Josh,
I don’t think you should be called MonkeyMagic but ‘MoneyMagic’ – mate, if you’ve got enough to buy a penthouse, you can retire now….
Kind Regards,
George.“If You never never ask, you’ll never never know”
MonkeyMagic,
Stop trying to compare apples with pears.
Different demographics buy different properties & they go through different market cycles.
If you buy top-end luxury property you’ll find that it’s an extremely volatile market – you can make a lot or lose a lot.
Buying solid established around-median dwellings you’ll find less risk.
Cheers,
Aceyducey
Geo, I wish I had enough money to retire on. I was mainly asking since people expect the apartment market to drop a bit in the next few years and I might have that money then, unfortunatly not now. Just want to be prepared.
Thanks Acey, I wanted to know what some of the main differences between apples and pears were as all I knew where they were fruits.[cowboy2]
Thanks Josh
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