Hi Everyone,
Using the principle that I only invest in positively gear property, what are the members opinions on investing in Serviced Apartments.
As an example here is the breakdown of an apartment I am interested in.
Asking Price $109,950 (neg)Currently Returns $971 per month.
Age: 10 years
General rates: $902 pa
Body Corp. Levies: $2,968 pa
Land Tax (Investors Only): $161 pa
Rent $971 p/m less R+R $94 p/m = $877.Last Year Grossed:
$11,652 (10.6%) Gross
Net return after all expenses = 5.9%All advise, opinions, suggestions welcome. The more I know the better my decisions will be.
Thank You in advance.
Aukssie
Hi Aukssie,
While the numbers may appeal you also need to consider financing such a property. Lenders tend to consider them as riskier investments and generally only lend around 70% (give or take a little in a changing market place) so you will need to consider this too.
Capital growth is problematic as you canonly resell to investors thereby taking potential homeowners completely out of the equation.
I recommend you do a search of the forum and read a few of theprevious discussions. The search faciltiy is located under the forums button at the top left of the the screen.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi Aukssie,
Have spent the last 3 years managing a serviced apartment hotel I have spen to many investors in the complex, most unhappy.
Be careful with the rental return, it may flucuate with the condition of the hotel industry.
Your investment has high volume “tenants / guests” so you will need to sink money in sooner to refurbish – check what refurbish clause is in place.
Very little capital gain due to in some instances over supply of this product.
Difficulty reselling due to limited market ie investors only.
Poor apartment/complex manager may turn your investment sideways.
A good rule of thumb, the greater the management fees the better the residential manager.
Some quality management companines in my opinion include Mirvac, Saville (Stockland), Medina (Toga Group).
If you would like more info send me a PM
Cheers
Jeff Aquilina
Need a holiday? http://www.coralsearesort.com email me [email protected] 20% DISCOUNT for PropertyInvesting.com members
Hi JJAUS,
I tried to check out your website at the bottom of your post but it appears to have a problem and doesn’t open.
Regards,
eeshole
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