Recently I talked with my friend and read from articles online, I am contemplating of buying a block of 3 2-bedder units in a regional area as my IP. Hoping it will provide good cash flow and CG after a few years. Leave the numbers aside, but purely looking at buying a block of units. What do I need to ask the agent before inspection?
Do I need to strata these 3 units if no existing strata company or do I just rent them out straight after settlement?
I still don’t fully understand how block of units work, is it too risky to buy them now as IP?
ThanksHi Peter
Must admit I am a lover of blocks of units (at the right price) having just sold a 18 pack in Brisbane after owning it for 12 years and still own 2 6×2’s here in Brisbane. Developed over 50 blocks over the last 20 years so think there is real value at the right price.
If you intend to keep the properties there is absolutely no need to Strata Title them however saying in that the Local Council my well charge you Council Rates on the basis they are 3 separate units.
Ask the Agent to email you a copy of the original survey plan and any other plans / documents that relate to the property i.e drainage plans etc as this may help when it comes to Strata Titling the property.
In regards to Insurance make sure you use a specialist Insurance Broker as it is unlikely your average Tom, Dick or AAMI will provide cover however that is fine and is like any other Insurance.
Many lenders will not touch multi unit dwellings however in saying that there are still a few that treat them as standard residential security and will go to 90% if required. (Assuming they are > 40 Sq Metres in size etc)
Property in the right place and at the right price can perform very well so don’t be put off by buying 3 in 1 go.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks Richard,
I have my eyes on a three 2-bedders in regional NSW which is fully furnished. Therefore I think it might be a good ready-to-rent option. It looks well painted and averagely renovated. It was sold in mid 2011 for 380k but now asking for 650k. Evaluation from my mortgage broker said it worth 600-710k. Do you think it has gained enough CG so that there will be little growth in the following years?
Since block of units is a good option, what numbers do I need to know to calculate the cash flow?
I also have my background info on the below post, Richard, would really appreciate to hear some suggestion from you.
https://www.propertyinvesting.com/topic/4998282-newbie-to-ip/Thank you a million.
Hi Peter
I am assuming your Broker has merely carried out a modelled estimate of the property to ascertain the value.
With knowledge of the property or where the property is located it is difficult to comment further.
Might leave your current Broker to provide you with such advice.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Course only thing I would assume us your Broker has advised you it is likely the valuation will be discounted by the valuers estimate of the furniture.
Sure he / she has factored that in.
You will only borrow against purchase price / valuation whichever is the lower so you end up paying for the furniture somewhere along the line.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks Richard
I m going to call the agent tomorrow and find out more.
Very excited to get my eyes on block of units.
Do you come across some good articles on block of units IP?
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