Buy one, get one free? Why this Rotorua apartment comes with a free office in Auckland

An apartment in Rotorua is being sold with an eyecatching bonus - an office space in a waterfront block in Auckland.

The "stunning" one-bedroom, 38sq m apartment at the Royal Court Apartments in the heart of Rotorua will go to auction on November 21 with a reserve price of $199,000, according to the listing on OneRoof.co.nz.

It comes with a secure car park and is rented out until January 2020 at $330 a month after which time the owner can live there or rent it out, the listing says. Annual body corporate fees and rates come to $3950.

A one-bedroom apartment on Hinemoa St in Rotorua is selling at a declared reserve of $199,000 - with a free Auckland office thrown in. Photo / Supplied

But in addition, the seller is offloading a 30sqm office space in the Scene One apartment building at 2 Beach Rd in downtown Auckland - for nothing.

Sounds too good to be true? You'd be right - the OneRoof.co.nz listing acknowledges there's a catch.

While the office space comes with access to a swimming pool and tennis court, it's leasehold, meaning the owner must pay annual ground rent, currently set at $7368, plus another $3023 in rates in and operating costs each year.

Ground rent is based on the value of the underlying land and is reviewed every seven years. The latest review was in 2018 but the new figure hasn't been finalised - meaning it's likely due for a steep increase.

The office can be used by the owner or rented out as an investment - or the real estate agent can sell it on for the new owner, according to the listing.

Rental appraisal is between $350 - $400 per week for the office, but it's currently vacant so until a tenant can be found the new owner will be covering all costs out of their own pocket.

The Auckland building has also had weathertightness issues and is subject to remediation, with future remedial costs not yet known. The Rotorua apartment has no weathertightness issues, according to the listing.

Another apartment in the Scene One building sold for a mere $20,000 in July and in August one sold for $84,000.

The office space is in the Scene One apartment building at 2 Beach Rd, close to Britomart in Auckland. Photo / Supplied

Ray White sales agent Dominic Worthington said the Auckland office hasn't been capitalised into the reserve price of the Rotorua apartment at all. That apartment has a 2017 rated valuation of $209,000 but he doesn't expect it to go for over $200,000.

The Rotorua property had a good inherent value but the Auckland office was "sweetening the deal".

"Buy one get one free ... hasn't really been done with property in the New Zealand context so we thought we'd try something different."

The owner had originally approached him with two properties to sell, and he suggested they sell them as a package.

"I said well, you've got two quite odd properties ... try and sell them separately it's just going to be painful. You put them together, we create a buzz and someone's going to see the inherent value in them."

The office space in Scene One that's available "free" with the Rotorua apartment. Photo / OneRoof

He said he and his colleagues were "straight shooters" with sellers.

"We say look, if it's going to be a headache and on the market for months and months ... with an asking price of say, $49,000 or $99,000 or whatever it is you're just going to be sitting there twiddling your thumbs for a year."