Strata Unit in Business Park

Hi There, I have an opportunity to purchase a strata unit in a growing business park. It is valued at 525k and owner has offered 465k. To be honest I have no idea about this type of property, is there something to look out for?

Thanks in advance.

 

Is the owner also the developer?

How was the value of 525k derived? Actual sales or cap rate?

Who is the tenant and strength of lease?

What are strata levies and how does forward projection on admin/sinking funds change the levies

Do you have 30-40% deposit?

 

Hi Dave,
525k is actual value from professional source.
yes, the owner is also the developer, their property management company now runs a number of the units in the park.

I have no info as yet on the strata levies. Is that really important part of the deal? What is a realistic scenario?

 

Initial year levies are going to be low. Many maintenance items are covered by warranty so maintenance is minimal eg lifts, ac systems, gardens etc.

Be prepared to take a hit in year 2.

Your lack of clarity on what your net return will be as you're unaware of the outgoings is a major concern (even if the tenant pays 100% of outgoings ).