Hi all,
I am a little confused about buying "blocks of units" that have not yet been strata titled.
Lets say there is a "block of 10 units" in a Regional area somewhere up for sale. I've heard that in many situations the block of 10 won't be strata titled yet – i.e. they haven't been separated into individual properties for separate rental. My question is – if it isn't split into 10 separate units, what would the existing owner (who is selling the property) be using the block for? If they can't be rented out separately wouldn't it be a waste to hold on to the property in the first place?
It sounds like the existing owner already has a great opportunity to strata title each of the 10 units themselves and make good $$.
Seems I might be missing something. Let me know if you have any thoughts.
Regards,
AjayAjay
The property doesnt have to be Strata Titled for the units to be rented out individually.
In many cases landlords (and i have 2 such blocks in Brisbane) will not Strata Title them because they dont want to have the units individually treated for Council Rates or Land Tax so keep them as a multi purpose dwelling.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
There are also costs involved in getting the property strata titled. You will need to get a strata plan drawn up by the surveyor, assign unit entitlements etc and submit a development application to subdivide the property into strata lots. this then raises the issue of compliance with building regulations. You will be required to make the property meet the current building code not the code from when the property was built eg 1977 – this may require the installation of fire doors to every unit, smoke alarms connected back to the fire indicator panel, hydrant or hose reels, exit lighting, ewis or non-fire issues like compliant handrails & balustrades.
Qlds007 wrote:AjayThe property doesnt have to be Strata Titled for the units to be rented out individually.
In many cases landlords (and i have 2 such blocks in Brisbane) will not Strata Title them because they dont want to have the units individually treated for Council Rates or Land Tax so keep them as a multi purpose dwelling.
Cheers
Yours in Finance
Hi Richard – thanks for this. In that case, what is the primary motivator(s) for a landlord to Strata Title a property? Keeping it "multi-use" will cost less, avoid Strata set-up fees, all the admin/paperwork to deal with governments and more. Doesn't seem like much of a benefit to me if you can get similar weekly rents. Plus you have the ability to have it "multi purpose" so I assume that makes it more flexible.
Cheers
AjayAjay
You may want to sell 1 or more of the units hence the reason for Strata.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Landlord may rent out Strata Titled units while waiting for the money to afford a renovation before on selling each individual unit.
Or may rent out as a backup plan if the selling plan falls through.Another expense is if you need to extend internal wall to top of roof in bricks to meet fire isolation of each unit.
Another situation is original owner passes away and who ever inherits block of units doesn't want to look after them and sells entire block.
Hi Guys,
I have been driving past two blocks of units next to each other up for sale in need of a cosmetic reno that look ripe for strata titling (am assuming they aren't already) for about a year and each time I drive past I think 'what an opporunity, wonder why they haven't strata titled'.
I haven't been involved in any strata titling before, so what would be my first point of action if I wanted to investigate this possibility further – i.e. find out if they are/aren't strata titled already (?real estate agent, section 32), speak to local council re strata titling rules/regulations etc.
Any advice?
Cheers
Kaz
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