Hey all,
Just wondering if there is any reason why this would be a bad idea? I already have one unit in this complex of 8, and noticed another (exact same as mine) is for sale. I have owned mine for 7 years and it has not appreciated very much. However its always been easily rented and was fairly inexpensive. Currently it pays for itself with rental income.
The unit currently for sale is identical to mine, and has been listed for quite a while with a big price drop. Currently I could purchase it (and i am in a position to), and would almost straight away have it paying for itself via rental income, like my first one.
The nature of these units is very low end of the market– 1 bedroom/studio, very small. But great location on the inner north side of Brisbane with access to everything.
I am wondering if there would be any negative aspects to owning 2 in the same complex however. I guess i feel its best to diversify and this goes against that. Although I also have another investment property on the Southside of Brisbane, so not all my eggs would be in the one basket.
Any thoughts from the more experienced out there?
Hi Melissa
To answer your question;
Pros
Increased voting power at AGM
Less effort involved to stay across portfolio (eg. you only need to be a part of 1 strata executive etc)
Cons
Should a special levies be required, your responsible for two portions
Should you need to sell both units quickly, having two identical units for sale in the same block at the same time would greatly reduce the 'perceived value' of both units.
…
If I can add, although I understand that having a investment that is positively geared from purchase can be very attractive, considering that you really haven't had any capital growth in the 7 years that you have owned your current unit, and the current owner of the 2nd unit is having a hard time selling, I'd be fairly hesitant to take this one on…
Matt
Hi Melissa,
I did that about 10 Years ago. Been great. Yes there have been special Levies, MY roof leaked!
I also did the Gardens myself (and got paid by the BC for it) for a couple of years. Did a better job then the professional Gardeners I might add. Really easy to manage them.
Adrian Cahill | AdrianCahill.com Personal Development Expert
http://adriancahill.com/from-investor-to-coach/
Email Me | Phone MeHere since 2002, however things have evolved over the years.
If you haven't received any or little capital gain in seven years then you are either overdue for some or history may repeat it self.
You need to decide if this is the case and if no gains are likely then may be a good idea to look else where imho.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
Melissa97 wrote:Hey all,I have owned mine for 7 years and it has not appreciated very much.
Hi Melissa
This reason would be enough for me to give it a miss – unless you're getting a significant discount.
It might pay for itself – but if it's not going up in value then you've got to question whether it's a good investment and could the money be used better elsewhere?
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Jamie M wrote:Melissa97 wrote:Hey all,I have owned mine for 7 years and it has not appreciated very much.
Hi Melissa
This reason would be enough for me to give it a miss – unless you're getting a significant discount.
It might pay for itself – but if it's not going up in value then you've got to question whether it's a good investment and could the money be used better elsewhere?
Cheers
Jamie
Really?? It depends on the reason it hasn't had growth. Maybe it's not a good investment area but maybe it's overdue for some price correction. One unit I bought hadn't moved for years (before I bought it in 2008 in Sydney city). It went up nearly 50% in 2 years.
It also comes down to knowing the area. Why did you first buy in this area, and is that still a valid reason to buy again in this area. Can you see any economic drivers that would help increase rents or resale value in the coming years.
On a side note, I'm not a fan of studio apartments as you cut out most of the market, unless the area really caters for studio living (eg inner city, close to amenities etc etc).
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Hi Melissa,
I'm from Brissy too, and my places haven't seen much growth for several years. Signs appear to be changing for the better recently though…. But then, I have houses – I gather units have a different way of working. E.g. I gather the dynamics differ in that, a forced sale in a block of apartments can impact on perceived value of all of the units.
So could it all come back to WHY is that other owner dropping his price? How are the other owners handling things? Any whispers re others also wanting (needing?) to sell soon? And is the current "value" being arbitrarily dropped because of this one seller? What do other owners (and RE agents, etc) see as today's value of these units?
Who are the usual renters of studios in your location? Are their numbers dropping, or increasing? Have rents been ticking upward over the last few years (even while values have stood still?). Any extended vacancies?
Seems to me you might already be able to provide your own answer, as I'm sure you'd be "keeping an eye on things" as an existing owner. And you would be better placed to answer them all than any of us, unless we also owned one of the other units. Do keep us up-to-date with your thoughts…. I'd be interested to hear what you decide,
Benny
I think it comes down to knowing your market. In the US, I can usually pick up a very cheap condo or townhome that was a poorly producing investment property bc either the management was awful OR the owners had no idea what they were doing. My favorite buy is the 2/2 townhome with a oversized living room or extra sunroom. I turn that into a 3rd bedroom and make money. I just took a 2bed unit that was hardly ever rented at $400 a month US turned it into a 3bed/2ba and got $1,700 a month before expenses which netted $850/mo or more than twice what the old investor got. WE do this kind of thing every month these days.
I rarely would buy a studio or 1/1 for my model they just don't work unless it's a vacation type property I can rent and also use some. However, you know this project and if it's positively geared appreciation is a bonus. If you know you can keep it rented, I say go for it. i'm doing deals where the rents are paying for the unit in 4 years times and that works for me!
Hi Benny
Not sure which part of Brisbane your investment properties are located but mine which are mostly in the Inner West suburbs have gone thru the roof recently.
I listed a block of 6 units in 1 line for Private Tender a month or so back and was stunned by the response i got.
Some of the Tender offers were $200K over what i estimated the valuation.
Unfortunately as ever buyer wanted the purchase subject to finance I have decided to retain the block and relist it again in the Spring when i expect the prices to be ever higher.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Catalyst wrote:Really?? It depends on the reason it hasn't had growth. Maybe it's not a good investment area but maybe it's overdue for some price correction. One unit I bought hadn't moved for years (before I bought it in 2008 in Sydney city). It went up nearly 50% in 2 years.
Yep – I wouldn't touch it. But that's me.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
can you do a Spiral staircase ? or knock out a wall and make a 2 bed 2 bath ?
my little one bed flat was hard to finance ,but easy to rent for over 10 years and sold quickly when i needed the cash ( after a tidy up , which was cheap as it was small ! )
i wish i had have bought a few !
cheers !
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