Grand Central Apartments, Auckland

[Davo36]

Did a search but couldn't find anything on this site about these apartments.

I've had an agent contact me today about a bunch of these going cheaply. Well he says they are cheap anyway...

So I know these are leasehold, there's been heaps of problems with the roof and so on over the years.

So I know they're crappy really, but can I ask, how crappy?

Like does anyone know of any current problems or problems likely to crop up in the near future?

Has the ground lease been set? Or is this still being argued between the parties?

Does anyone know what demand is like for them, i.e. how easy/hard they are to rent?

All info/comments appreciated.

[eri]

they are a huge question mark

so much money lost, so much screwed up in conversion and now quake? risks

what they need is the charity of well cashed up investors with big portfolios

who can afford a dog property

they might do a little well one day...

but for those that would borrow to buy

stay away

stay away

[RHarris]

These really could have been alot better but again screwed up by incompetent developers.

[NomoneyNotalk]

Hi there,

I used to live here when i was a student at AUT. The quality of building i could see is very poor. It was newly renovated when i lived there, i assume these last few years there would be heaps of problems. And u mentioned there is problem with roof. So there should be some leaky issues with the building.

My friend was working in a body corporate management. And she managed some city apartments with leaky problems. And it was not the leak that is hardest to fix, it is the legal battle the owners have to go through. Owners have to hire a lawyer and lawyer will ask developer to fix the problem. And this process will take years and sometimes no resolution. And owners keep paying the lawyer which increases their body corp fees, and then they sell cheaply.

An agent offered me one of these. I know it is cheap but the problems in there will cost you a lot more.

And it is leasehold, Plus the leak. Stay away

[props4u]

My friend was working in a body corporate management. And she managed some city apartments with leaky problems. And it was not the leak that is hardest to fix, it is the legal battle the owners have to go through. Owners have to hire a lawyer and lawyer will ask developer to fix the problem. And this process will take years and sometimes no resolution. And owners keep paying the lawyer which increases their body corp fees, and then they sell cheaply.

An agent offered me one of these. I know it is cheap but the problems in there will cost you a lot more.

And it is leasehold, Plus the leak. Stay away

Spot on ... also agree with eri and RHarris ... nothing but trouble

[Davo36]

Ok, thanks guys.

I've come to this same conclusion.

Things like this always look good on the surface but there's always a catch in the end...

[Bob Kane]

I've had an agent contact me today about a bunch of these going cheaply. Well he says they are cheap anyway...

How cheap?
I think CitySales sold a few for about $10-20k a few years back.
And that's probably all they are worth - which is rather sobering.

[Davo36]

Well Bob, it turns out thee are quite a few different kinds of apartments in there.

Studios (which are really just a very small room, about the size of a small bathroom, but longer and narrower.

One bedrooms - slightly bigger

2 and even 3 bedrooms.

Mostly they don't have kitchens. So you share in the big communal kitchens. But some of the 2 and 3 beddies seem to have their own kitchens in them. Not sure about toilets...

So they're not all the same by any means. And if a property has no kitchen or bathroom, can you even call it an apartment? It's really more like a big boarding house than anything else.

A bunch of them are being quoted to me at a 16% net return. But it's too risky:

• The body corp and other outgoings are very high, so 70% of all the rent you collect goes straight back out to pay the outgoings.
• It's leasehold with rent reviews every 7 years. So the land lease component can just keep going up and up.
• As someone above mentioned, earthquake risk. This is an old brick building. I don't know when it was built but it must have been a while ago, and if the council ever says it has to meet 67% of the code...
• The whole development is basically just shoddy and has such a bad reputation now.

[Maccachic]

I feel for the poor owners in these situations - stuck in an awful sprial: increasing costs, decreasing value and no one prepared to take them off their hands.

[Davo36]

I told the agent (via email) I wouldn't take this any further, and this was his reply:

There was earthquake strengthening done when the building was refurbished and the Body Corp are waiting
on the Council to confirm that no more work is needed.

So there may in fact not be any outstanding earthquake type issues, it's hard to tell without looking further into it.

[eri]

wonder how long they will wait...

2 years for verbal?

5 years for written?

who will pay for the engineering report?

is it likely that shoddy work done well before chch will meet the new codes?

have they even been written?

give the whole lot back to ngati whatua

[NomoneyNotalk]

Investment under $10,000

• Price by negotiation
• Listed: Sat 22 Sep, 3:55 pm
• Listing #: 516365568

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Te Taou Crescent City Centre Auckland City Auckland

1 bedroom, 1 bathroom

[NomoneyNotalk]

Maybe we should reconsider it if it is under 10 k?

[Davo36]

Well instead of looking only at the capital value, you have to also look at the investment return.

This link, gives the figures for a 2 bedder:

Current gross annual income: $365 x 52 = $18980 (car park income = $1250 pa)
Management fee: approx 8% (if you choose to use the manager)
Income after management fee: $18711
Body Corp + Ground Rent for next year: $13053 (carpark = approx $610)
Auckland City Council rates for 2011/12: $976.95 (+ carpark approx $50)
Net income: $4021 pa
Approximately 8% net return

So you take in about $20k and you end up with $4k in the hand...

The outgoings on this property are very high. 75% of what you collect goes back out in expenses.

And of course the ground lease can go up every 7 years, the rates will surely go up every year, and the insurance? That could be a huge issue for a building like this, it could double or be totally unobtainable, who knows?

Also, in the 2012-2013 body corp budget they have allowed $100k for engineers to report on earthquake issues, so obviously this hasn't been totally sorted.

Still think your $10k would be wisely spent there?

[NomoneyNotalk]

Goog point Davo. This property might have negative cashflow in the future when the rates are up, making it worthless.