2 Units or 1 Brand new home???

Depends on your strategy? Is it cash flow or capital growth you are chasing?

Generally land increases in value and building decrease in value. In saying that the older style apartments usually have a greater land component than newer similar properties.

Rule of thumb for land / building ratio is 70 / 30 so this may help you determine your strategy.

Also would be a wise move to ask for last 2 years financials and minutes of the AGM from the strata manager via the selling agent to check what works are in the pipeline as older buildings will need ongoing maintenance.

@rex, let the figures guide you.

What was the previous 10 years growth on the apartments you are considering v the house you are considering purchasing?

I like to look for houses that I can add value to either via a renovation or even better (potentially) retain and subdivide or knock over and replace with multiple properties.

Depends on how involved you want to get. Developing is not for the feint of heart but can be lucrative if you get it right.

I have an eBook development course I am happy to email to you.

BRWT wrote:

Looking for feedback from anyone please,Brand new 4bd, 2 bth Home $490K excl Stamp, Solicitor etc……Rent Appraisal $385 pwAbout 20km out from CBD, and capital growth of 7% per annum,
or
2 Units, each has 2bdr, 1 bth, 1 carpark (both built in late 80’s early 90’s)Unit 1:Selling at $235kcurrently tenant at $295 pw (tenants happy to stay on board)Body corp $11 pw
Unit 2:Also selling at $235krent appraisal at $285pwBody corp $32pw
By the end of Sept 2016 I would have saved $70KI have NO assetsNo Loans, good credit historyCredit Card Limit $5000, amount owed right now is $500
Really stuck on this one. Havent spoken to anyone about this. Just wondering what is the best path to take. Your feed back is greatly appreciated.

Hi BRWT,

Colin is right. Nobody I reckon can give you an answer to the “what is the best path to take” without knowing more about your goals and also your financials (a few examples would include: would negative gearing hurt your next purchase? Do you even intend to make more purchases? Are you after cashflow?).

A few things that may be worth noting:

1. Banks look at your credit card limit, not the actual balance so if your borrowing power is borderline, it might be prudent to cancel the card all together (a mortgage broker or a lender can easily run scenarios with you, no worries).

2. One of the disadvantages I found with units is that you don’t have the same control as with a house. Tenants are complaining that the roof is leaking? With a house, you call a tradie and s/he fixes it. With a unit: you notify the body Corp, they might drag their feet, then source 3 quotes, then debate who to go with it and only then they book the chosen one. So what could take you 3 days to fix with a house is a 3 weeks saga with a unit (true story).

Hope this helps? :-)

@ethantimor flick me an email on [email protected] and will gladly send you a copy.

Cheers.