Stop buying units /apartments

I remember I once went to a Seminar and one Property spruiker said never invest in Units /Apartments etc.

Well i disagreed with him at that time but now i have come to agree.
My PPOR is a 36sqm 1 bedroom without parking in Sydney.
Probaly get $525,000 for it.

You wont make any money from it though just like the others unless you just want CG.
Rent is averaging $480 week.
Strata frees are the killer at $1418 per quarter plus your Council Rates and Water bill so nearly $2000 a quarter.

My strata fees are cheap some are over $2000 a quarter.
I dont think City Apartments are the go.

 

The exact reason to invest in property in one line.

If the numbers work, this is the only way to make serious life changing chunks of cash in property.


pinkboy

 

I agree, but more due to oversupply issues than due (necessarily) to the expensive running costs you mentioned. My Alexandria 1/1/0 unit, though 60sqm internally, is my best CG-performer in the short term, but my worst cash flow nightmare (as in, rental return has dipped as running costs continue to explode).

Inner Syydney Melbourne Brisbane and Perth I wouldnt touch with a 10 foot pole.

 

A 36 sqm, 1 bedroom with 1418 strata a quarter is NOT all apartments. That's the perfect description of what unit never to buy. After you read like 1 book you'll come to that conclusion very fast. Its no secret.

Again, it doesn't mean all units are the same as that. I have made much $$$ from some units. Comes down to property education.

 

I agree, give those box high rise apartment units the flick. As Leo states not all units are the same...I am making a motza out of Townhouses & Villas. Have doubled and tripled in value in 10 years along with rental yields, on 105-106% lends.

 

I wouldn't say "never", but I'd say there are a few factors that distinguish potentially good vs potentially bad unit purchases.

Better unit purchases:

• are in smaller complexes (reduced alternative product commoditising the unit)
• don't have a lot of "extras" covered by body corp - e.g. gyms, swimming pools, etc. and thus have relatively low strata fees
• are reasonably priced relative to alternatives and considering market basics, e.g. don't cost more than a 3BR freestanding house within an easy commute
• preferably are cheap enough that you can buy enough to control the body corporate
• aren't so small that you have difficulty borrowing to purchase
• allow pets

And I'm sure I've missed some. Anybody care to add to the list?

 

* are well built
* developer is not holding voting rights
* well run strata
* unique and desirable features

 

And the thing is i can advertise it at 530k and i can bet you someone will pay it this weekend.

Forgot to mention the special levies we are having too this year at 1599 a quarrter thats on top of the 1418...never ends...i just go to work to pay strata fees it seems..im starting to really really get sick of it.
Hard to invest in property when i have nothing but bills all the time.
Im on over $1500 a week salary so i often wonder how someone on $500 a week here in inner city affords it.
I know theres owners in here in this building with 4 bunk beds paying off a mortgage and have 3 asian students in the other beds but..what a life sharing with 3 others in a 36sqm room just to pay strata fees and a mortgage.

 

Why not rent and let somebody else pay the strata fees? You're also likely to want a different lifestyle at some point, and renting gives you flexibility.

 

Man.. that's killing your yield ,
by the looks of it seems you are living in newly build apartment in City area ?

 

yes, overcrowding is the norm in Sydney CBD, especially when the apartment has no concierge or security guard (like in Regis apartment 303 Castlereagh).

I've been living in a sunny room shared with other people (bunk bed in Sunny room) while the other two bedrooms was filled by 4 other people, so in total 10 people for 2 bedders paying approximately $150 (backthen in 2011).

Some people that I know also rent or living in the livingroom with a divider so yes, the land lord is very much profitable with those cash in hand.

 

As others said

Stay away from hige rise in fill unit/apartment development.

Investors have done well in buying a 3 story walk up units...old apartments but excellent location can set you off for good cg,opportunity to add value and one day developer mag offer serious $$$$$$ for whole complex.

Such apartment have low starta cost too.


Disclaimer: I don't own any apartment,but have seen above examples with friends and family.

 

Some more...Modern/near new, 3 or 2 bedroom, 2 bathroom, UMR garage, Security for occupants and vehicle, Spaciousness, Comfort ie heating and cooling, courtyard.

 

@Rixter
yes, do you mean something like this attached:

new apartment now spans across two different levels and some got media room ;-) which is quite interesting.

What do you think of the pricelist below ?

note: I'm not affiliated with the agent at all, I'm just looking for a unique investment opportunity.

 

Does having no common walls count?

 

I think that's a plus, but so exceptionally rare as to not fall within the scope of a discussion of "units".

 

Just one adjoining wall is desirable though. Zero if you can find it!

 

haha - my mistake. i think this is correct term to describe what i actually meant.

 

36sqm and 550k circa is way crazy in anyone's terms. 2.5k in interest loss and strata dance makes it even more desirable. the only good is heating costs i guess. I bought a unit to live in not to invest a while ago and i sometimes regret but occasionally appreciate my choice. no strata, corner unit with one common wall 100sqm, fenced and 2 car ports. i wonder sometimes what else could buy my 190k budget.

 

As others have said, units are fine but you need to pick the right type in the right location.

I really like the old and boring 2 beds/1 bath brick units. Low entry costs and CG has been exceptional. An example is the 2 I bought in Western Sydney in late 2012/2013, they've both done 50%+ CG since then while being low maintenance and decent yielding.