Apartment in prestigious vs above average area

if you had a choice between two apartments:

Apt 1: it's in a prestigious area, one of the most expensive but it's a company share title and its 10% more expensive and not as big and well designed as apt 2.

Apt 2: is in an above average area. It's an area that has a bad rep 10 years ago but has gentrified although not fully. This apartment is 25% bigger and has its own title and the layout is more functional than apt 1and it's 10% cheaper.


So which would you choose? Would you pay 10% more and take a compromise on size and functionality to live in an area you love and feel good in every day or would you go for the cheaper, bigger apt in worse area which gives you doubts.

 

Is it for a home? or Investment?

 

Before deciding I would look at:
- Median prices
- Growth history for apartments in those suburbs over the past 10 years
- 'standard' sort of apartment in the area
- proximity to amenities
- ability to add value
Good luck with it!

 

Have you had a look at what company title entails? I think that would be a very big deciding factor

 

WHat suburbs are we talking

 

^ ^ this!!

 

Company titles are from what I understand a pain in the butt! Essentially everyone has to approve a new owner and there is a bit of sway on other things as well

Key questions should be, what are you looking to achieve? Look at your goals first then go from there

 

Yes, extensively. This is a company title by name not by nature. There's no restrictions or anything except it will be hard to sell in the future due to banks not lending against them.

It is possible to transfer from company to strata at the cost of about 2-3k per owner which would significantly increase its value if that were to happen however it's not something you should rely on.

You can get a company title unit for about 20% below market value however it depends on the unit and the market.

The rental yield on this property is very good, one of the best yields save for CBD apartments which makes it very appealing to me in the long term as it will be positively geared from the get go.

I am looking to live in it initially however rental yield is important as I value mobility and being able to rent it out for a good amount were I leave the state is important. However, the drawback being it could be tough to sell were I wanting to do that. At the moment, I don't see any reason why I'd want to sell.

Are there any issues you can think given that information?

 

• Conversion to strata will require a DA & will trigger a fire order
• Directors of the company have a say in who you can accept as a tenant (if anyone )
• Ease of borrowing
• Lower valuation than equivalent strata property

 

what I like about company share title is that because I don't need financing it gives me a greater edge over other buyers which means a lot less competition.

What I don't like about buying something that everyone else wants is that you'll have to overpay to beat everyone in an already overheated market.

Does that make sense?

 

West Footscray vs st kilda.

I'm buying despite my beliefs of a downturn which will hit apartments hard. I'm leaning towards st kilda even if i have to comprise on size because if I have to hold in order to ride it out I'd rather be stuck in st kilda than west Footscray.

Do you think I'm being rational?

 

St Kilda is very charming. you have to go there on a Friday/Saturday night to really appreciate it's character.

I'll look into those suburbs you mentioned. There's a candidate in Richmond I'm looking at but I'm not as familiar with Richmond as St Kilda.

What's crazy is I'm seeing 1 beds in Footscray sell for 345k, old complex. For that price you can get brand new in Parkville or established in Brunswick, richmond etc...

Do you think the government equity share scheme has something to do with that? Footscray is the only inner city suburb on the list..

 

Is it that bad to buy a company share title that's operating no different than a strata? If you get it at a 20% discount and sell it at a 20% discount you haven't lost anything.

 

Keep in mind the liquidity of a company title unit is much less given it will generally take a long time to sell.

It might be operating like a strata complex now, but what if the owners change and the new owners have a controlling interest in the company and also have some crazy ideas?