Old units with internal size around 40sqm

Discussion in 'What to buy' started by Summerohoh, 16th Nov, 2020.

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  1. Summerohoh

    Summerohoh Member

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    Hi guys,

    I am a newbie here:) Have been reading and learning a lot from this forum and I’d like to hear your thoughts on old units with very small internal size.

    I am looking to buy a one bedder unit PPOR in Sydney. While searching online, I’ve seen some really old but unique properties with internal size of around 40sqm. Some properties may have a garden as big as the internal size. A lot of them appear to have their own character for sure.

    Simply out of curiosity I went to inspect one which I linked below. Probably out of my range, but would love to know if you’d buy anything like this or what’s the appeal of this type of property? Given that they can be as old as 100 years, would it be costly for maintenance? Can you expect great capital growth for this type? What’s the pros and cons of this type of property (eg. some banks don’t lend for tiny apartments)?

    One example - Sold 8/101 Kirribilli Avenue, Kirribilli NSW 2061 on 13 Nov 2020 - 2016511030 | Domain
    This one was built in 1920s and has an internal size of around 40sqm.

    Thank you so much.
     
  2. Shogun

    Shogun Well-Known Member

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    What does something like that sell for?
     
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  3. Rich2011

    Rich2011 Well-Known Member

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    What's the past growth been like for this type of property over the last 10 years?
     
  4. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    One big hurdle you'll face is that banks heavily penalise <50sqm internal area as rule of thumb. They are reluctant to lend and those that will generally want you to have a higher deposit, usually upward of 30%.

    There might be some mortgage brokers on here who can clarify the lending criteria but that is definitely an issue for investors who are generally looking to preserve input capital where possible.

    - Andrew
     
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  5. Summerohoh

    Summerohoh Member

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    Hi Shogun, the example above was asking for roughly $875k- 900k due to its location in Kirribilli. It doesn’t have a view but very close to the water. The final price sold was not disclosed online.
     
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  6. Summerohoh

    Summerohoh Member

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    Based on info online, this one was sold in 1994 for $165k, and $480k in 2011. It’s quite a significant growth in the past two decades.
     
  7. Summerohoh

    Summerohoh Member

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    Good point Andrew, would be interested in knowing which banks are open to lend for this type. I know some non bank lenders could fund this via their commercial lending book. Not sure if that’s true though.
     
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  8. tedjamvor

    tedjamvor Well-Known Member

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    Can you find similar properties that are proper 2 bedroom instead of 1bed/1study? The market for those is a lot larger, so likely easier to sell down the track (and above 50m2, so easier to get finance approved).

    Examples 1 2 3 4 5
     
    Last edited: 16th Nov, 2020
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  9. Summerohoh

    Summerohoh Member

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    Yep that makes sense. I will keep my eyes open and look at different options. Just that when i saw this type of property with great character, i felt a bit tempted :)
     
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  10. qak

    qak Well-Known Member

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    I'd love to live in Kirribilli ... *sighs*
     
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  11. Shogun

    Shogun Well-Known Member

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  12. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    I admit I don't know enough about this, but how would a non-bank lender fund a resi property via a commercial loan book? Genuinely interested to learn how these interact if they do.

    - Andrew
     
  13. Lindsay_W

    Lindsay_W Well-Known Member

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    Never have I heard of that before, I'd likely say this isn't true but even if it was it would not be a good idea.
     
  14. qak

    qak Well-Known Member

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  15. Shogun

    Shogun Well-Known Member

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  16. qak

    qak Well-Known Member

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    I know what the difference between JT and TIC is in relation to ownership of a single property; but this implies the whole complex is held as TIC ie you hold your share as TIC with everyone else in the building.
     
  17. Shogun

    Shogun Well-Known Member

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    Community Title?
     
  18. Summerohoh

    Summerohoh Member

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    Yep it could be rumors.