Hi all,
After chatting with one of my previous buyers agents, I was informed that buying an apartment in a complex fo more than four apartments was a bad idea? Is this true?
Furthermore, I found this property with 7% return and although Steve McKnight says 10.7% is the desired return, should I be investing in this property? http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2004870202
Cheers my brothers
Some people believe that the larger a complex the more likely there will always be other properties on sale at any given time. This creates competition when selling and can reduce the achievable price.
I personally don’t know if this is true in effect.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
In what way did the buyer’s agent think it was a bad idea?
The more in a complex, the cheaper it is to buy (because it’s cheaper to build) and the greater the returns!
Vacancies can be higher in multi dwelling compexes, but these should be factored in to your calculations.
Re the 7%, it could be a good deal, depends what you exit strategies are (what are you hoping for?)
We buy properties in Adelaide. No Agent Fees.
[email protected]
INCREASE THE CASH FLOW FROM YOUR INVESTMENT PROPERTIES!
http://www.renttoownau.com/ http://www.vendorfinanceau.com/thanks for all that advice its realy helpful!
In what way did the buyer’s agent think it was a bad idea?I think that he thought that an oversupply or glut in the complex would result easier than if if was a smaller apartment complex?
Ill I could add, is make sure the 7% return is net. If it is a gross figure, unlike commercial property, you will have to factor in strata fees, management fees etc. This will definately make the property negetive geared, and with the tenent locked in for 4 years your options are reduced.
Is there a problem here to solve or are you solving the problem?
JES
If you are buying your investment for long term return, there is no evidence that an apartment in a block of 10 would recieve a lower rental or worse capital growth than in a block of 4.
Sure there is some “exclusivity” in a small block of apartments, and large blocks would put off some buyers and tenants.
What is the cut off mark ? 4 or 6 or 8 or 10??
I would avoid large blocks, but 6 or 8 in a block is fine, if everything else stacks up.
Michael Yardney
METROPOLE PROPERTIES
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