Hot investment property comes with approval for a bordello

Possibly Sydney’s hottest property investment – which previously brought in $6000 a week – is set to go off with a bang. But there is a catch.

This could be Sydney’s hottest property investment – and it’s set to go off with a bang.

A three-storey Surry Hills terrace heads to auction on Tuesday night with an agent’s guide of under $3 million.

While the estimate represents a mid-range price point for the inner-city suburb, it’s the potential rental riches that will likely titillate savvy investors.

The unassuming terrace on a compact 137 sqm block was previously tenanted for a jaw-dropping $6000 a week.

Sound too good to be true?

It’s not, but there is a catch.

A three-storey Surry Hills terrace heads to auction on Tuesday night with an agent’s guide of under, $3 million.

To rake in those big dollars, a tenant like the last one would need to be found – they ran a brothel from the Albion St premises, now listed as a six-bedroom, six-bathroom offering.

As an investment, the numbers are seductive.

Borrow $3 million for the purchase on an interest-only rate of 6.5% and an owner could sit back and pocket a profit of $115,000 a year.

Used as a brothel by its last tenant, the property is now listed as a six-bedroom, six-bathroom offering.

Rental riches will likely titillate savvy investors as the unassuming terrace was previously tenanted for a jaw-dropping $6000 a week.

If the interest rate dropped 1% the annual profit climbs to almost $150,000 – providing a weekly passive income more than three times the minimum wage.

On the realestate.com.au website, an advertisement from agents CBRE promotes “existing approval for a bordello, with an operating time certification from 10am to 5am”.

According to the sales pitch,

“these hours are unlikely to be approved ever again by the City of Sydney council”.

The listing also details how the terrace, currently vacant, was “previously leased at circa $310,000” per annum.

In a further enticement for buyers, agents outline how the property provides “significant traffic and signage exposure, secure entrances with CCTV and dual car port”.

It also has a mixed use zoning allowing for transformation to a private residence, a boarding house, or a commercial/retail premises subject to council approval.

The auction next week is sure to arouse market interest.

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