7% yield within 10km Brissy CBD - catch?

I've got an off market opportunity of a dual occ house with a 7% yield. It's in a 'satellite CBD' 10km to Brisbane's CBD.

It's a dual occ highest on 400m2. There is a little housing commission in the immediate area (5%), but not much beyond that. Quiet street, convenient.

I can't find any advertised rental listings, but have asked for tenancy agreements.

What are the pitfalls? Can you run a dual occ in Brisbane CBD? It's an upstairs/downstairs house configuration.

I've driven past and it looks ok... can't get it til next week but tempted to buy it with a couple of conditions anyway!

Thoughts?

 

Unless it's LMR it's probably not legally done and even then... How long has it been configured like that?

 

No idea
I know the block it is on has been split about 8 years ago. That's all I can figure out at present

 

What is the zoning?

 

Is it legal??

The preferred option for dual occ is separate entry for each tenant, reduces headaches, just my personal opinion.

 

It's LDR
Separate entrances are obvious from the street
Isn't there some loophole where it can be set up, but no more than 5 unrelated tenants?

 

Talk to @RPI . Darryl is the guru with this stuff.

BCC is cracking down on these illegal setups. Who knows, maybe the vendor got a nasty letter and they are trying to get out while they can...

 

Drop RPI a line he is a solicitor/townplanner located in Brissy and written many posts on g/flats, current laws etc. May help??

MTR

 

Hehe
You pipped me to the post

 

Is there BCC approval?

If not, then probably illegal.

As said, BCC is cracking down so maybe the vendor had had issues already.
Marg

 

Can you move one of the entrances to the side so not as obvious? or put up a do not disturb sign, or do people use a tie on the door knob?

 

Brisbane city council - dual occupancy

 

Does it have 2 electricity meters and water meters? My sister has an old house that was approved by the council decades ago as 2 flats and has separate meters. I don't think BCC approves these arrangements anymore so electrical companies are not allowed to install separate meters etc for you. If not legal will also affect insurance if house burns down or damaged.

 

Yes, there's 2 possibilities, either it was approved a long time ago by BCC or it's illegal.

 

Do you know the vendor outside of this sale, are you friends with them or similar? If not, why not just call BCC and ask them to confirm if it's legal or not. You could avoid a big headache if they say it's not legal. Having said that, if it's not legal then they could pursue the vendor if they haven't already and if the vendor is a friend now they might not be a friend later :-|

 

No idea who the vendor is - I'll call and see

 

This is a good point that buyers can call BCC and neighbours too, if illegal dual living suspected. This will put a quick stop to the arrangement and high yield gone.

 

I went through the place today. It's a bit of a shocker, but nothing a bit of TLC wouldn't fix.

But,

It has

1. Two letterboxes
2. Two numbered front doors
3. Two electricity meters
4. Two sets of bins
5. A 'rooming arrangement', whatever this means - no lease, at least partly 'cash'
6. The most effective desire for a need to shower that I've ever had inspecting a property.

 

Do the numbers still stack up @Bran ?

 

Careful though - you can prove and tell yourself there are 10,000 positives on the list, but it only needs BCC to rule against you and they wipe every other one (unless you really like high risk (IMO) ventures, probably voiding insurances and the like).
@RPI