Buying a car space in a building I own a flat in.

Not exactly sure which is the best spot for this - there are a few bits to it.
One of my Marrickville (Sydney) flats is a 39sqm one bedder.
There is a car spot in that building that I think I could buy. So my questions are:
1. If the car spot is put onto my title, will my flat then be seen by a bank as over 50sqm? This of course would bump up the value of it by more than the cost of the spot.
2. The loan on that flat is IO with a 27 year term. I will pay cash for the car spot, but will changing the size of the lot require any change to the loan?
3. What would be the process of buying that car spot?
4. How would I arrive at a reasonable price?
Scott

 

Thanks Rolf. Good that some lenders will like kindly on it. My IO loans (with 27 years remaining) are with St George.
Anybody know what process I would go through to buy that space? (Apart from agreeing on a price with the current owner.)
I suspect I would get a conveyancer involved.

 

@Depreciator

1. Leave the car space on a separate title otherwise you will need to resurvey etc and retitle the entire strata ie DA, owners' consent, new strata subdivision with revised boundaries. Does the space have a separate lot or is it exclusive use (change of by-law required)
2. Changing title will require new loan application
3. For an off-market transaction, negotiate the price & terms, each party to have own solicitor for independent advice but bit compulsory (possibly offer to cover legals).
4. Write numbers on a dartboard, consumer 5 nips of single malt, put on a blindfold, spin clockwise 6 times. Take 3 shots at the board & average.

 

I know nothing about this ,but what sort of yearly return would something like this return ,as maintenance would be very little apart from cleaning up the oil leaks ..

 

Thanks Scott.
Looks like separate title is the way to go.
Yep, I will cover all legal costs.
Willair, I would not rent out the space separately, but include it with the one bedder. Parking in that little pocket is scarce and becoming more scarce as more apartments get built. A well positioned one bedder with a car space will rent more easily (and for more money) than a one bedder without a car space.

 

That's a good plan if included with the rental and would make the property a lot quicker to lease out if all the rest don't have parking..

 

If the park is on a bit of dirt ..surrounded by air
Otherwise there is normal building maintenance

 

@Depreciator if the car space does not have a separate lot number, how will you separate it from the overall parcel title without a strata subdivision (new valuation (mandatory), revised unit entitlement etc)

if the lot has been designated an individual lot number (standalone) and not a Part (Pt) Lot, in NSW we refer to these as utility lots.
Typically, the use is restricted and cannot be purchased outside of the Strata scheme.(sec63 strata act.) (i think ?)

an exclusive use by-law sounds simpler if allowed.

- watching with interest.

 

Probably $35-50/wk. However, if it's on a separate lot, it brings with it voting rights based on unit entitlement, rates & strata levies so it's bit money for jam.

I recall a recent court case where a non-resident owner of a space was enforcing their right to access common property (needed to pass over common property to get to & from the car space). The owner pays strata levies so had a right over all common area, not just the direct path to the parking (this includes the pool, grounds, lifts, rooftop BBQ etc)

 

Things are always more complicated than imaginable.
I'm keen to have the car space on my title only because according to Rolf there are some lenders who will allow a car space to be included in the total sqm of the lot. If the total sqm of that lot goes from 39 to over 50sqm, there will be an increase in value greater than the cost of acquiring the car space.
So the benefits of the space are twofold: better rentability and increased value of the total lot.
I'm on the strata committee and the managing agent likes me, so there shouldn't be any problems there.

 

Are there any issues with purchasing the two lots under a single loan? Is it any different to buying two small freehold lots similar to widow lots?

I'd worry if the managing agent took a fancy to me. They may be looking for a listing.

 

There aren’t many lenders that do this I’m afraid. It won’t open up the number of lenders possible very much. IMO it’s not a great reason to proceed.

 

carspace on separate title would be worth more than a unit with a car space i thought?

 

Thanks tobe. Good to know. Of course, it's not the only reason to proceed. A one bedder with a car space under the building in an area where parking is difficult and becoming more so will attract tenants more easily and be worth more. Having it on the same title keeps things neat.

Scott, I'll be paying cash for the car space if it happens. But it seems like fiddling with the title of the property means mucking around wit the loan. (Oh, and I meant to write it's the strata manager with whom I get on well.)

 

I am coordinating a reno next week on the common area laundry for this building - getting rid of the privately owned machines and installing two coin operated machines. There is not enough room for the people who want to put a machine in that laundry.
I might start a thread on it. This morning, despite lots of notices, nobody had disposed of their machines. There would some passive aggressive action happening. It might get interesting.

 

Put one of these in instead - Great way to get extra income