Hi, I was wanting to know which option would be a better strategy. Option 1 is buying a block of 10 units. Option 2 is buying 10 units in different buildings in different suburbs so they're all spread out. (Assume that all units have the same specifications) How do these scenarios play out in regards to diversification, land tax and body corp fees to name a few. I would like to know the pros and cons and which option do you think would be better? Thank you.
You can improve the shared areas and increase the rent, diversify into student holiday let style, knock it down and build a new one with more units.
Ask @Handyandy he owns quite a few blocks Option 1 Control you have potential to add significant value if block can be strata titled Down side will need commercial loan Harder to source the blocks because there is high investor demand
It all depends on your personal circumstances but I'd sway for option 1 as buying a block of un-strata titled units would be beneficial as units main cash flow killer is strata as @tobe said you have free reign on making it your own. Not wasting money like strata management does and the option to strata and sell some off once you've made some equity. Buying individual would be time consuming, more inspections, buying costs etc It is good to have your portfolio spread out so that's one positive for option 2.
The ability to strata title them is one benefit (assuming on single title) - this can add great value.
If you get it right, then you get it the power of 10. If you get it wrong same same. If you get one or two of your spread out 10 wrong not as bad. Your more likely to get a couple more right in attacking several locations. This can give you opportunity to extract equity from these two quicker etc
