All Topics / Help Needed! / Over 55’s unit as investments

Viewing 14 posts - 1 through 14 (of 14 total)
  • Profile photo of Tony FlemingTony Fleming
    Participant
    @the-dark-knight
    Join Date: 2008
    Post Count: 396

    I was just wondering what professional investors thought of over 55 units. Are they as less profitable than normal strata title or harder to sell in the future??? Any advice would be greatly appreciated.

                     Tony

    Tony Fleming | Triumphant Property Group
    http://www.triumphantpropertygroup.com.au
    Email Me

    NSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    i personally wouldn't even consider them. Low capital growth, hard to sell and hard to finance.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of YossarianYossarian
    Member
    @yossarian
    Join Date: 2006
    Post Count: 136
    Terryw wrote:
    i personally wouldn't even consider them. Low capital growth, hard to sell and hard to finance.

    What Terry said. Finance can be *very* difficult.

    Profile photo of Scott No MatesScott No Mates
    Participant
    @scott-no-mates
    Join Date: 2005
    Post Count: 3,856

    Why would you consider an over 55's covenant when the block of units next door offers similar or better amenty without a restrictive covenant?

    Profile photo of ShedinShedin
    Member
    @shedin
    Join Date: 2012
    Post Count: 14

    With our aging population as we are hearing daily would over 55's accommodation be improving as an investment these days? If I am seeing 2 self contained studio units on one title sold together for $130K and renting at $140-$170 a week each even with body corp and other fees, considering the area…these figures add up dont they?

    Profile photo of Scott No MatesScott No Mates
    Participant
    @scott-no-mates
    Join Date: 2005
    Post Count: 3,856

    Two trains of thought:

    • one of my associates (he'd like that), built a small development under SEPP5. Single storey villas, open air parking, 2 bedroom. BIR,  bare bones. All leased on a 10 yr lease to a housing co-op. He's laughing on 12 months of summer holidays.
    • On the other hand, as I noted above, why would you consider it if it is not the highest and best use for the property?

    Profile photo of ShedinShedin
    Member
    @shedin
    Join Date: 2012
    Post Count: 14

    On further due diligence every one of them in the complex seems to be for sale…that obviously not a good start! Steering away from over 50's villages!

    Profile photo of Nigel KibelNigel Kibel
    Participant
    @nigel-kibel
    Join Date: 2005
    Post Count: 1,425

    The problem with aged accommodation is that like student accommodation it is a very limited market. Yes they return more than the average however if you are still losing money on the investment and theres no growth what the point.

    In my view unless you are getting great returns which seems to mainly happen in the mining areas capital growth should be why you buy in Australia. So look for suburbs around Australia that have a history of 7-10% capital grown.

    I generally look at suburbs within 10km of city centers however there are exceptions.

    Nigel Kibel | Property Know How
    http://propertyknowhow.com.au
    Email Me | Phone Me

    We have just launched a new website join our membership today

    Profile photo of Tony FlemingTony Fleming
    Participant
    @the-dark-knight
    Join Date: 2008
    Post Count: 396

    Hahahah i remember looking into this years ago silly young Tony

    Tony Fleming | Triumphant Property Group
    http://www.triumphantpropertygroup.com.au
    Email Me

    NSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury

    Profile photo of mattstamattsta
    Participant
    @mattsta
    Join Date: 2011
    Post Count: 604

    I would never invest in over 55 units. They are extremely gard to sell and make a very low profit. I would recommend you to invest in the property that target middle age families.

    Profile photo of xdrewxdrew
    Participant
    @xdrew
    Join Date: 2010
    Post Count: 479

    Investing in an aged 55 plus unit is very much like investing in a mobile phone.

    Its gotta look good .. be functional .. and have the facilities you require.

    Its only AFTER you have purchased .. that you find the real expense comes from the billing system.

    As an investment for longer term growth, no. As a means for finding out what its like to purchase a very average property .. sure .. call it a learning experience and find out what everyone else already knows.

    However … having said that (quite a mouthful) .. realise what everyone else already knows .. that changing a property from one type of criteria to another is a chance to make a lot of money. Some of these aged care facilities are made incredibly well and have good facilities. As MANAGED (non aged care restricted) properties they will actually be quite profitable. If its possible to change its overall criteria from leper to prime position managed properties .. you'll make a lot of money turning it around.

    Profile photo of Scott No MatesScott No Mates
    Participant
    @scott-no-mates
    Join Date: 2005
    Post Count: 3,856

    xdrew, these things aren’t nursing homes or retirement villages that have management they are smaller unit style developments under SEPP 5 where there are no facilities or common rooms, just a unit in areas with transport, health services etc but are zoned 2a not medium density.

    Profile photo of AlasdairAlasdair
    Participant
    @alasdair
    Join Date: 2005
    Post Count: 34

    Seems like the overwhelming opinion here is to NOT invest in these over 55 units.

    Yet a few days ago on Nathan Birch's Binvested Facebook website I came across the following article;

    _ _ _ _ _ _ _

    "Attention investors, 20%+ yield and $100,000 purchase price.

    Could be the craziest deal all year! We have secured 10 X over 55 units which come with 2 units on 1 title for $100,000. There were originally selling for $200,000+ and we have secured these direct from administrators.

    There is 5 left which need to be allocated to investors today.

    They rent for $400 pw and have depreciation as a bonus.

    You will probably require 50% deposit also, so please dont ask if you can buy with 5%."

    _ _ _ _ _ _ _

    Agree that these over 55 units might not have much capital growth, but buying at such a discounted price and with 20%+ yield they seem to be a good investment.

     

    Profile photo of TheFinanceShopTheFinanceShop
    Participant
    @thefinanceshop
    Join Date: 2012
    Post Count: 1,271

    There is no doubt that they are not 'standard' securities however as Scott has stated – they should not be mistaken with nursing homes or retirement villages.

    Regards

    Shahin

    TheFinanceShop | Elite Property Finance
    http://www.elitepropertyfinance.com
    Email Me | Phone Me

    Residential and Commercial Brokerage

Viewing 14 posts - 1 through 14 (of 14 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.