NSW House in Fairfield NSW - 900m2, house+extension+gf, total rent $1100/week

Discussion in 'Property Analysis' started by carva848, 20th May, 2017.

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  1. carva848

    carva848 Active Member

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    Hi all,

    Would love to get your thoughts on this.

    182 Fairfield Street Fairfield NSW 2165 - House for Sale #125259570 - realestate.com.au

    Front house was originally 3 bedroom house. Extension was added to the back of this house to create a 2 bedroom/1kitchen/1bathroom/1 laundry (this extension is a separate living space to the front of the house - common wall separating the two). Granny flat was added right at the back with 3 bed/1 kitchen/1 bathroom/1 laundry. Currently being rented out at $400/$300/$400 respectively - total $1100/week. Vendor asking $920k.

    Sounds good on paper - however, upon taking the contract to a solicitor, turns out the granny flat has no occupancy certificate. Also, apparently you are only allowed 2 kitchens per block of land (this has 3).

    Questions.
    1. What risks are involved upon ownership of this house? Tenants complain for whatever reason, council comes, sees the unapproved gf and extension - asks for it all to be demolished? Can this happen?
    2. What sort of price would make this a good purchase taking into account the risks involved.

    Thanks in advance!!
     
  2. Gockie

    Gockie Life is good ☺️ Premium Member

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    I don't know, definitely not an expert.
    But...
    1. The extension being separately leased would concern me. Does it have a fire rated wall separating it and the main house?
    My gut feel is that the house hasn't been approved as a dual occ.

    2. The granny flat is also a concern. Are they squeezing 3 bedrooms in a 60 sqm dwelling?
    Red flag, I think it mightn't be all legal hence there's no occupancy certificate.

    I'd give it all a wide berth. Too risky. You probably can't legally get the $1100 rent using the way that they are currently. Of course I could be wrong. But it doesn't feel right.
     
  3. carva848

    carva848 Active Member

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    I don't think it is a fire rated wall separating it from the main house. Contracts don't show that it has been approved for dual occ.

    The gf is bigger than 60m2.

    So what are the risks involved with the purchase of this property?
    If tenants complained to council for whatever reason, they may come and check it out and request for the extension and gf to be demolished (worst case) - cost 50k?
    Insurance probably won't cover the extension and gf in the event that something unfortunate occurs.

    Would it be safe to still consider the property - price it as accordingly to comparative saves with other 3 bedroom house on 900m2 block in fairfield, and renting it out to just one tenant instead of 3? Albeit, it would probably only rent out for $600/week or so.. So at an offer of $800k, would it be something worth considering? (not likely that they would even accept $800k, but you never know - no one else may be open to the purchase and the vendor may get desperate! haha)

    Edit - probably more likely at 800-850k as the land value alone would probably be around that..
     
  4. Gockie

    Gockie Life is good ☺️ Premium Member

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    Too much illegal goings on for me for both the second and third sets of rent. You can't bank on that income.

    And.. I wouldn't be surprised if someone gets a knock on the door from council.
     
  5. dabbler

    dabbler Well-Known Member

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    Cha ching.....

    someone is going to beat you to the punch now you posted it......maybe that will be lucky rather than bad luck.
     
  6. datto

    datto Well-Known Member

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    ^^^^^^^^^^^^^^
    "The gf is bigger than 60m2."

    She's a big mamma!
     
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  7. dabbler

    dabbler Well-Known Member

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    Too big for you datts.....need to upgrade to a pantec
     
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  8. Propertunity

    Propertunity Well-Known Member

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    If you are looking for rental yield, perhaps something like this? :p
    upload_2017-5-22_10-11-50.jpeg
     
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  9. carva848

    carva848 Active Member

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    Haha. Was actually looking at cg in the Fairfield/Cabra/Canley Heights area but then came across what I was would've been good yield and growth!
     
  10. carva848

    carva848 Active Member

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    UPDATE: granny flat was CDC approved which counsel has record of. However no occupancy certificate - most likely due to the actual build not complying for whatever reason. If it was because they made it too big - i.e. turning the planned garage into a third bedroom, would it then be possible for me to convert that third bedroom back into a garage, resulting in the overall gf to become 60m2, and then apply for the occupancy certificate? Who would be the best people to speak to about this?
     
  11. neK

    neK Well-Known Member

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    You can only have ONE Secondary dwelling on the site... that's why its called secondary.

    If you want this to be above board then:

    1. Convert the Granny Flat bedroom back into garage so that it is under 60sqm. Get the occupancy certificate.

    2. Rent out the front has ONE house, not two.

    So don't expect the $1,100... not possible if you are trying to stay above board.
     
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  12. Gavin Ng

    Gavin Ng Well-Known Member

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    May have trouble getting OC as the GF may not be consistent with the origianl CDC and CC that was issued for it.

    Best to speak with the certifier for the CDC and see what they can do for you in terms of OC. It's at their discretion to whther or not they want to issue the OC, if you could revert it back to an approvable condition it may be willing to issue an oc.

    Another option is to scrap the whole oc idea and apply for a building certificate.
     

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