Combine two units into one

Discussion in 'Innovative Property Investment Techniques' started by tk421, 15th Jul, 2021.

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  1. tk421

    tk421 Well-Known Member

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    hypothetical kinda!

    So if units are in a strata so far I have read first if you manage to buy two units that are next ot each other there are MANY hurdles.. so has anyone here done it?

    First the strata would have to agree to it, sometimes people can just be asses just because, Big hurdle!

    2, most building dividing walls are structural so chance of just cutting a hole between the two is very unlikely, which leaves joining them via some kind of external structure, which could be expensive.

    3, from what i've read the local council and utilities are very unlikely to consider it as just one unit. Meaning you will still be slugged for two sewerage;water;power;rates; strata fees and something i'm probably forgetting.

    Possible Plus : so you might double your footprint and in a suburb where 500sqm of land is selling for maybe a million there could possibly be value in it, plus you might gain 1.5/2 parking spaces.

    Banks, not sure how they will see it, so far it seems they will be like the utilities and consider it two lots regardless, but maybe not?

    Has anyone done this? thanks!
     
  2. Marg4000

    Marg4000 Well-Known Member

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    I have heard of it being done, but only while the building was still being constructed.
     
  3. thatbum

    thatbum Well-Known Member

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    I would have thought in 99% of situations you would be losing capital value rather than gaining any.

    Otherwise instead of subdivision threads, we'd have more threads on amalgamation value-add projects.
     
  4. wylie

    wylie Moderator Staff Member

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    I know a family who did this, knocked through the adjoining wall of two top level units in Hawthorne, but it was over 20 years ago so who knows if that could be done so easily again.

    And you would want to know if you are losing value, or gaining value.
     
  5. datto

    datto Well-Known Member

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    Been thinking about this myself. Just waiting for neighbouring unit to go on market (if ever).

    I wouldn’t bother going through the hassle of a hole in the wall. Probably cost a Motza even if it’s allowed.

    Nah, just leave them as they are and walk across the stair well to get to the other unit.

    Got another idea, if you buy the unit below or above you could put an internal staircase. And that probably won’t interfere with the structural integrity of the building.

    Another alternative could be to extend the balcony from one unit to the other. If strata don’t like that idea then maybe some planks of wood going across will do.
     
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  6. Handyandy

    Handyandy Well-Known Member

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    Combining units can be done and more than likely is less onerous then you might imagine.

    Modern units generally have non structural walls between units and as such the only hurdle is the fire ratings.

    On older brick style units all walls are structural to some degree and in fact the walls between units is no more or less structural than any other wall in the unit.

    They can be altered based on engineers advice. The process is that a steel beam is inserted in the wall whilst the floor on each side is propped up. Once the steel beam is inserted and grouted in then the wall underneath can be removed leaving sufficient structure on each end of the steel beam for support.

    As mentioned the capital gain is doubtful just because of the substantial increase in expenses, but the process is done more-so in prestige's type blocks with substantial views.

    Seachange did a consolidation some time ago but that was in an older company title block.
     
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  7. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    It can be done and could enhance value. However strata approval is a must. And they will require specific works to ensure access and works performed dont compromise others. Getting approval sometimes may require compensating the strata and other owners too. They may also require it to be permanent and change lot entitlements and merge the SPs into one interest.

    Barry Humpries was a notable case where approval was not obtained. He created a hole in the floor to combine a apartment above another into one grand apartment. Later acquired by Cate Blanchett. Another was the "toaster" building at Circular Quay. Four very expansive top level penthouse floors were merged to create one massive super apartment. It cost a lot to persuade other owners to give approval.
     
  8. skater

    skater Well-Known Member

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    I have seen a small set of three weatherboard set of units, probably not up to code today. One unit was bought by a couple, another by the parents. The idea was that they buy the third out and combine all three.
     
  9. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    Why not just keep it as a separate title as this will likely value higher than two units combined.