Hey Everyone,
At first I never thought that one bedroom units wouldn’t pull in any money, thought that they were a dead investment.
although went to inspect one yesterday, in Brisbane, 6kms from city, quite roomy for a one bedder, close to transport, in block of 10, older style unit for $195K – agent said rent would fetch $175 per week but i would try for $190 as that is what others a pulling.what are ur thoughts?
MC
As long as they are not a studio unit i think they are absolute winner. I own a block of 1 bedders in Brissie and the rental returns have been excellent.
Always are the easiest to rent as many people are now staying single longer and dont want to end up taking a flat mate to subsidise the rent.
Just be careful on the post code location to make sure that it will be acceptable to your lender but a good MB should be able tosort all that out for you.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
Hi all,
Im from Sydney and asking the exact same question here. 100K more expensive though!!
Im confident that the one im looking at will pull in rent. But i just cant seem to get my head around the prospect of it gaining capital growth. From a reselling perspective which obviously I plan to do in say 10 yrs for example….it’s still just a one bedroom apartment, a spec in the scheme of things, and I am relying on it to increase in value obviously. Im trying to imagine what the economy will be like in 10 years time and wondering if asking that much for a one bedroom apartment is going to be as crazy as it feels like it would be, to me right now!Genie
With a lot of the new shared equity loan products coming to the market over the next few months the lenders are targeting the young individual looking to get into their cheaper first home.
1 bedroom units do and always will do fit that mould. With the divorce rate climbing people want their space without the cost that goes with a larger property.
A lot of the problem is that not a lot of 1 bedroom units are being constructed due to the price of the development land and the greater GR’s are in the 2 / 3 bedroom units due to the higher end price.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
Thanks for a great thread, mcubed.
Most replies you’ve got here are precise and hit the nail on the head. The legitimate question arises when we face with 2 or 3 bedroom in the outer suburbs or a one bedder in the inner suburbs for around same price. This is even more pertinent when one is trying to get a foothold into the property market.
There are two opinions on this; either never buy one bedder for its limited potential (I’d like to see some stats for that), or buy one bedder in inner suburbs only.
I agree in future there will be less demand for MacMasions. But I do distinctly remember reading an article about the success of the Baby Bonus scheme backed up with unprecendented birth rate.
Interestingly the shared equity comes into play and may distort it even further. Just heard form the wireless that government is also talking about getting their hands into shared equity with home buyers.
Would be great if someone in the know can compare figures for the two scenarios for yield and growth for buying for keeps [inlove].
CT
One bedders: Personally I love them…
Even studios… I recently saw one sell for $175K renting at $300 pw proven income in Sydney…
Who cares if it’s a studio… if you can get that good of return on it…You can get some good deals if you have a fair bit of equity …
because a lot of people CAN’T buy them due to lending criteria…For example:
there’s a studio in potts point at the mmt…
selling for $120K… rents at about $160…
Now it’s only 14sqm… so most lenders wont lend to you unless you have 20% or more….
The rule in Sydney is basically..
If it’s less than 40sqm living space then you’ll need 20%.That means if DO have equity and can get it for around $100K…
You have a unit that will rent for $200 in a few years time in Sydney city…As they say: Problem + Solution = Profit
Good way to get in the market. Look for the right suburb and area in the suburb. One bedders need to be near public transport, easy access to the CBD, Uni etc. Close to supermarket.
Just bought one bedder at Underdale, ADelaide (4km to CBD) for $122K (bank valued at $145k) and renting at $150pw. Almost could have had an auction and got more. 20 groups turned up in the 30 minute opening.
Make sure you get positive cash flow for this end of the market to compensate for vacancies etc. Also good Landlord Insurance. AAMI cost us only $71 – worth it.
MichaelHi All
I am a newby and I am about to sign up for a block of 4 x 1 bedrm units in Jesmond in Newcastle which is close to shops & uni. The building is pre-war but is structurally sound and all units are tidy & currently renting @ $145/wk with potential of $175 after minor maintenance. I hope to buy for $420k + closing costs. There is also a 100 m2 storage shed at the rear which is rented to neighbour for $100/wk. All up my figures show the property is about neutral return. Given the state of the market, would any of you guys buy this type of investment which will tie up my equity but hopefully return capital gain in time.
rob
Rob i now Jesmond well and think that sounds like a good investment.
As you say longer term you should get both capital growth and some nice cash flow. As they are onyl 4 units you should get 80% LVR on that at residential rates even a good fixed rate thinking about it should make it almost C/F neutral.
Also i must admit i do not know 1 lender that will lend 80% on a 14 sq M unit away from private funding.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
Could I just say that studios can also have a place in your investment portfolio.
We have a range of properties from 4 bed homes to 2 bed units and our most recent purchase was a studio in Springhill in Brisbane. The rationale was to obtain cashflow and have a property we could use whilst in Brisbane or for our daughter who – cross fingers – will go to University there in 2008.
The building was a motel which has been strata titled. There are a range of units from the studios to the 3 bedroom units available. A proportion are owner occupied and a percentage are available for rental. So far the unit has been earning us aproximately $500 per week for an outlay of $155,000 which includes legals, stamp duty etc as the building manager has been pursuing corporate rentals. Permanent rentals for studios can be up to $275 per week. The building manager actually said she had no trouble renting the studios but had more trouble renting the one bedroom units.
The only downside for an investor is that you need 20% equity or own funds to get into the deal.Hi Rob….
That block of four units sounds great…
Good price from the sound of things for land content, 4 units plus the shed is a handy bonus..
Could be great to save up and redevelop later on down the track…Hi Richard…
My broker (mortgage choice) gave me the all clear…
He said CBA was willing to lend 80% if I had enough equity.
I think they were still looking for 50% equity but would lend 80% with 20% downpayment…
I’ve decided not to buy that unit… I feel I can do better..All the best,
AnthonyHi The Contrarian, I’ve been looking around Waterford recently. You can purchase 3x2x2 units 94sqm with river views Albert River for $190000. Rent $240. 30 mins Gold Coast/Brisbane. I’d rather the Spring Hill studio though. Predicted by government population in nearby Beaudesert will more than double in 20yrs. 65000 population now. Heaps of jobs being created in Bromelton (4500+). Do your own research though. I’m still researching. Linda
Anthony ok that makes sense.
CBA wont do 14 sq M as a stand a lone deal but maybe if you have equity else where.
Linda, Waterford is another up and coming area especially with the river view dont think you can go too far wrong with that as secure investment.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
Yer, thats what I’m thinking! Thanks.
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