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Pros & Cons of Buying multiple units in same building

Discussion in 'General Property Chat' started by standtall, 18th Jul, 2016.

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  1. standtall

    standtall Well-Known Member

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    So a friend owns a unit in a building with 9 other units in it and he has been offered another unit by the agent at a reasonable price.

    What are the pros and cons of owning more than 1 units in a small block?

    Thanks
     
  2. Ouga

    Ouga Well-Known Member

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    "Trying is the first step towards failure" Homer
    Pro: more control in owners corp, possibly easier to manage.
    Con: more eggs in a single basket
     
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  3. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    Main one is getting stung for 2 lots of special levies at once for any major works
     
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  4. Marg4000

    Marg4000 Well-Known Member

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    He has experience of the block and should know of any drawbacks.
    Marg
     
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  5. Terry_w

    Terry_w Tax and Structuring Lawyer Business Member

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  6. hash_investor

    hash_investor Well-Known Member

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    Check the body corp. They can really stink.

    I have seen townhouses being sold 50K less than market price because body corp is 10K per year.
     
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  7. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Marginal benefit:
    • An extra vote in body corp meetings - but these are usually restricted that you cannot outweigh more than 50% of the vote in a lot of body corp agreements

    Negatives:
    • massive proximity risk
    • strata risk from special levies
    I can't see that much benefit from it.
     
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  8. Big Will

    Big Will Well-Known Member

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    Buy the 9 other units and you have full control.
     
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  9. Excalibur1

    Excalibur1 Well-Known Member

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    So if they own 50% in their name and then 1% in wife's / husband's name they can still have more control?
     
  10. standtall

    standtall Well-Known Member

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  11. hobo

    hobo Well-Known Member

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    Does owning two in the same block get him closer to his ultimate goal? ie Is it a great deal on a unit, regardless of other ownership?

    Be careful (and I know I'm not talking to you specifically) of thinking that two is better than one, just because they are in the same block. It still doesn't actually do anything for you (/him) until you start to buy enough to reach critical mass in the complex (except, as mentioned, if the purchase fits the numbers as a good buy even without taking into consideration whether one owns another unit in the complex already).
     
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  12. standtall

    standtall Well-Known Member

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    I think his motivation was that he will be able to skip a lot of due diligence on the area, just repeat the transaction and use the same letting agent. After all people like to stick to familiar paths.

    The point about stamp duty aggregation put him off as he will have to pay another 10k or so in stamp duty which he didn't budget for. He now owes me and @Terry_w $5k each.