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Need advise what to pick - cheaper strata unit?

Discussion in 'General Property Chat' started by Vanvir, 12th Sep, 2016.

  1. Vanvir

    Vanvir New Member

    Joined:
    27th Jul, 2015
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    Location:
    Sydney
    Hi guys,

    We are still newbie investor and this is our 1st time.
    We have been searching around units and found these 2 units but we confuse which one to pick:

    unit 1 - 2bedroom 1 bath 1 garage: renovated, price $385K,strata $500, size 80m2, rent $370
    unit 2 - 2bedroom 1 bath 1 garage: renovated, price $380k,strata $380, size 60m2, rent $350

    We confuse how to pick and calculate the best return from these?
    What is the main factor to choose the unit, is it the strata or the rental return against the unit price?
    Thank you so much for all your inputs guys.

    Virginia
     
  2. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    Location:
    NSW
    Are they both in the same (or different) suburb?
    Rental return is only one thing to consider. CG, vacancy rate etc also needs to be considered.
     
  3. Scott No Mates

    Scott No Mates Well-Known Member

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    Sydney or NSW or Australia
    • Why is the strata levy so high or low?
    • What would happen if the strata levy increases/decreases for planned works?
    • How healthy is the sinking fund to cover the 10 year planned maintenance requirements?
    • Which unit has the best net return
    • Are there many ip in the building?
    • Is tenant turnover greater in the small/larger unit?
     
  4. neK

    neK Well-Known Member

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    Sydney
    Numbers (quantitative) only mark up part of the picture.
    You also need to look at the Qualitative factors... which is what the others have mentioned.
     
  5. Vanvir

    Vanvir New Member

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    27th Jul, 2015
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    Location:
    Sydney
    Hi guys, thanks a lot for everyone reply, yes it is the same suburb. I tend to go to unit 1 since it's bigger size and it's conveniently close to shops rather than the other one which is quite far but there may be a change to get increased since there are new development going on.

    In summary:
    unit 1 - quarantee and much safer return
    unit 2 - a risk to take, in future may be going up because of development surroundings
     
  6. neK

    neK Well-Known Member

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    Imagine for the moment EVERYTHING other than location was identical.
    Which one would you pick to live in right now?
    Which one would you pick to live in for the future?
     
  7. Pumpkin

    Pumpkin Well-Known Member

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    Brisbane
    I would do a simple SWOT analysis.
    What are the good points of #1, and not-so-good points, financial and non-financial.
    Do another one for #2. Spreadsheet them out. No emotions attached.
    You are the best person to know the answers.
     
  8. Phase2

    Phase2 Well-Known Member

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    Perth
    20sq.m is a big difference in a 2bed unit. If there are new developments going up around the 60sq.m unit wouldn't that make it even less attractive in future when there are shiny new ones to choose from?

    Knowing the very little I do, I'd pick the big one near the shops.
     
    New Town likes this.
  9. Mick Butterfield

    Mick Butterfield Well-Known Member

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    Location:
    Bermagui NSW
    Based on the limited info you have given I would go with option 1.
     
    New Town likes this.
  10. Elives

    Elives Well-Known Member

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    Location:
    Queensland
    I looked at a unit today and the agent told me that unit isn't separately metered for electricity or water, Is this common?