multiple units

Image credit: Framton Goodman

Are you interested in investing in a property with multiple units on one title? It’s what many investors prefer to do. However, lenders do have restrictions on how many properties can be purchased on one title, and the LVR (loan to value ratio) they will allow.

Why Invest in Multiple Units?

Townhouses, unit blocks, complexes, semi-detached houses and villas all offer investors an opportunity to purchase multiple dwellings under one title. Small unit blocks – 2, 3, 4, 5, or 6 – tend to be the most popular investment choice.

Blocks of units purchased under one title are often priced lower than if each unit was valued individually. It’s like purchasing each unit on sale. Maintenance costs will be lower per dwelling, and the higher-density living will provide you with a greater rental return.

There are, however, risks involved when purchasing multiple dwellings on one title. Keep these things in mind:

  • Research the area you are interested in. In some areas, the unit market is oversupplied. You want to ensure that all units are tenanted most of the time.
  • Remember that the rental value of each unit largely depends on its position within the block.
  • Ensure that all units are a suitable size. If a unit is too tiny, you may be hard-pressed to find a tenant.

Restrictions When Purchasing Multiple Units On One Title

It’s much easier to sell a single house than an entire block of units. That’s why lenders tend to be conservative when it comes to providing loans to investors looking to purchase multiple units on one title.

Lenders have restrictions on how many properties can be purchased on one title, usually 2 or 3. Some lenders won’t allow more than 1.

Lenders also have restrictions on the LVR they will allow, i.e. the amount of money you can borrow against a property. The maximum LVR is usually 80%, though 60% is not uncommon.

If you are looking to invest in a block of units, we can help you find a suitable loan. Give us a quick call on 1300 700 496, or email us.

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