Hi, I am not sure if we are supposed to do this, so please delete me moderator if I am not!
I am looking at a lot of different property in the southern NSW area, and this one is a bit unusual. I have spoken to some locals who have told me that before renos these had around 60-70% occupancy, but recently the 6 x 1 beds have been full much of the time, while 4 other 1 beds were being renovated to 2 brs, which are being advertised now. I see that fully occupied these would return 7.8% gross, and I figured around 7% nett after basic costs? (If I manage them myself) I am still learning and have not really done much more than look at other people’s costings here on the forum.
Could I pick anyone’s brains on these (if that is allowed, sorry if it is not!)
kjs
Hi kjs
Units in the countryside! These are not something I would ever consider myself.
This deal looks rather expensive, what are comparable prices like there? The yield is not that good, you may only be making a few dollars cashflow after tax.
6 units on one title may mean more difficult to get finance – ANZ maybe good for this, but they would probably only lend 70%.
Are there any capital growth prospects?
On a positive note, you may be able to strata title them and sell them off individually.
Terryw
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Thanks Terry. I think they are possibly a bit dear too, as the capital growth, while it has been good around that area in the last 5 years, is only following the city, but not as consistent. I wondered myself about the chance of further capital growth over the next 5 or 10, but I thought the return was not bad, compared to current Sydney & Melbourne returns, where the chances of capital growth are not that good either. The strata idea might be worth looking into. I appreciate your time in replying.[biggrin]
kjs
I would have thought overpriced, ie 60-70% average occupancy, 6 flats occupied = 60%. Is there a rental market for 2 br units. As the ad specifically refers to firewalls with the 2 br units, if you are interested in strataing the 1 br units check whether there are firewalls particularly in the roof cavities
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