Hi, I’m currently renting an apartment in Richmond (between bridge road and swan street) The owner offered me to buy it for 665 k. The apartment is in a cul de sac near Bridge road. It’s in a boutique block of 4 units, has a large backyard and private access to an adjacent public park. Very green and quiet given it’s in the middle of the city. The price seems more than reasonable but I’m not sure about its potential for capital growth. Just for clarity I’d consider buying it as an investment. This means that I’d move out and rent somewhere else. I’d love to hear your opinion on this as I can’t make up my mind. Thanks!!!!
We own an apartment not far away in Richmond, over the years its had good growth, although its become dated and the newer apartments have made it harder to rent out. Yours sounds like it has good land content and great location, you're in an excellent central suburb, as long as the price is fair then I think it would be a good buy. If you're living there now, why not continue to live there?
How big is the block of land? Only 4 on a block means you are getting a fair whack of the land component and associated appreciation potential. Richmond is a great suburb and I would hazard 80% of the stock is apartments. How old is the building and how many sqm is the built area? $665k sounds very reasonable (without knowing too much detail). Is it a ground floor dwelling?
@Tonkla I like to think of small block of units on good size land as semi-land banks. If the area has future re-zoning or pressure to go higher, then your 1/4 of the residual land under the existing units can be quite valuable should a developer buy all 4 and knock down. @Car tart wrote a good article on this aspect and had success with the unit block he had a unit in being bought out by a developer.
I always find it hard to understand the actual growth of this type of apartment. I don’t think it’s accurate to rely on apartment data for past capital growth as the large courtyard surely helps. Is that a fair assumption?
I've done some research on the property mentioned above. The property is a 2 bedroom ground floor apartment with a 30 m2 private courtyard. I've gone through section 32 and it states that all 4 apartments have the same lot area (98m2 each). Technically, the private courtyard is a common area but there is an agreement that the apartment I'm interested in has exclusive rights for it. Is this normal? The courtyard is fenced and the only way to access it is through the apartment. The apartment is in a GRZ, GRZ2 zone. The site value according to the council rates is 355k. If the purchase value is 665k, the land value is 55%. See attached Excel sheet. I have looked for similar apartments in Richmond (with large courtyards). The growth is much lower (average of 4% in the last 10 years) than houses, which it is a bit unexpected. I thought apartments with a twist like this one had good growth prospects. See attached Excel sheet. I'm still in the decision making process and a bit stuck in my head. Any other opinions and thoughts would be highly appreciated. Thanks!
I see it often enough. Usually the only problem is that the apartment above you looks down into it, so you can't go nude sunbathing etc. The Y-man
There isn't much of a twist - you really need something unusual - like a 3 bedder, 2 bath - then you start looking at scarcity. The Y-man
