Advice on buying a block of units?

In terms of strata titling the titles office are the ones signing off on that and the type of construction is vital to the success or failure of the strata separation proceeding. Fire separation is vital so all brick is best, otherwise expensive fire rating of all party walls is required. Also if facilities in each unit are not adequate to strata then you could hit hurdles. If this is your first one you could consider a JV partner if you know people who have done this. If you want to go it alone do your research first so you don’t get stuck with the wrong block.

Are you strata titling to sell? If so the market you are buying in a also critical as some regional NSW markets are good for selling into, and others are terrible right now.

To make the strata and sell strategy work you need to get the block at a good discount than each would sell for individually, also allow for costs, and renovations that may be required. You need a solid profit margin to make it worthwhile.

If you just want to hold the units for cash flow it may be cheaper ie rates etc to leave them as is.

If you are planning to hold, look very carefully at the holding costs. You will likely find that both the council and water company will issue a separate set of rates per unit even though they are not on their own titles. This adds up very quickly and chews into your return. Also look very carefully into insurance. There are not heaps of insurers that will offer insurance on blocks of units (GIO is one insurer that still insurers them so you could scope them out for a quote). Also if they are not all under the one roofline, that hikes the insurance bill even more.

Also be aware that if a tenant damages something in the common areas (eg fence) it is very hard to prove which tenant was to blame, so that’s always a repair cost you’ll never be able to take out of the bond of a tenant.