Hi, I’m new to the forum, but scanning through the posts its sounds like most ppl here are looking for pov+ geared properties in rural / do me up type states.
Would be interested to hear any thoughts on new apartments esp in QLD/NZ.
Returns seem quite good, plus if they are managed properly, no tenant problems, or time required to fix them up.
thoughts?
Hi,,,, and welcome to forum.
If you are talking about Off the plan apartments…..dangerous waters (short term over supply of an overpriced item)
I know gold coast apartments are widely regarded as a bit risky due to the high dependance on the tourism industry (volatile)
Propertyplus, please give your reasons why you think “they have quite good returns”, price of apartment and amount of rent
I don’t think either of these are cashflow positive…..in fact not even neutral geared.
So you would have to fork out money out of your pocket for as long as you keep them.
They may have good long term capital growth though..
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cheers
Live, Learn and GrowLifexperience
Hi PropertyPlus
Welcome to the forum!
I’m not quite sure what you mean by ‘Qld’ – it sounds like you are not one to venture out of the capitals, so does ‘Qld’ include gold coast? townsville/Cairns? etc?
It would pay to do some thorough homework in light of the softening market in most (but note, not all) places. New apartments you are looking at may be fine for now, but how many more have started to be built in your area, and what will the supply/demand ratio be like in say 1-2 years when the ones under way are finished?Also be careful about rent guarantees – they are often inflated and you pay for them with a higher purchase price.
Good management is hard to find – check it well before proceeding. Good tenants – we all want those! But can we guarantee them? Best to make a little room for both vacancy and extra maintenance just in case, so your final bottom line is more conservative than optomistic. If all still checks out OK, then why not?Details of something I am considering
Hobson Street Auckland
2 Bedroom, managed by Quest
PP $NZ $260K
Rental return: 6.6% Net (Guaranteed for 2 years)Yes – it does seem like inner city dwellings are overwhelming esp in Melb but if you look at the stats and the ABS predictions, there will still be a shrtage for quite a while.
Don’t have the time to do much work on renos.
6.6% yield is $1760 pa rent.
So if you buy at 80% LVR, you will need
$52000 deposit
$10000 closing costs (approx)
$62000 total.Your approximate expenses may be
$2500 rates
$1230 (i am guessing at least 7%) Management fees (are probably more)
$500 repairs (shouldn’t be too bad if its new)
$16853.16 Loan repayments (6.5% on $208000 over 25years)
$21083.16 TOTAL EXPENSE PER YEARSo for a $62000 investment you are losing $21083 – $17600 = $3483 ($66 per week)
Thats ok for a negative geared property that you expect to increase in value.
The problem is that “Quest” have probably already increased a price margin. And if you had to sell in the near future, I am betting that you would be lucky to get $230000 for the place.
Spend time researching all of the above details, or you may be duped.[biggrin]
Live, Learn and GrowLifexperience
Is those apartments the ones across from Auckland Uni and a part of the Hyatt/managed by Hyatt. They were advertising them for 250k guaranteed 425pw.
I reckon property plus is just marketing NZ properties.
Ah….Yack, you scared him off. I was just starting to have fun.
Live, Learn and GrowLifexperience
Sorry – I came on a little strong eh!!!!
Sorry Property Plus if you had genuine queries, but a lot of posts are made that promote their product by talking it up.
“Seems quite good” to describe apartments in Australian Capital Cities will evoke immediate skepticism as a lot of people are currently being burnt for such purchases……ie: if you bought a Melbourne Docklands apartment recently, you would struggle to sell it now, and would definately take a loss if you did so.
If you are marketing your own company, I would love to crunch more numbers with you anyways.
cheers
Live, Learn and GrowLifexperience
Hmmmm, I don’t much like renovating properties – that is, slapping paint around on a roller is fun for 2 hours, but i did it once for 4 days and the novelty has worn off. Besides I don’t have time these days, there are fish to be fried and television programmes to be made!! but I digress….
Nevertheless, it’s the disgusting dumps that (if structurally sound) that for a simple 3-5k cosmetic make-over can be transformed – that make the investor more money than the dolled up ones. But there is ‘the hassle’ involved. But you DON”T have to do it yourself. You can either call tradespeople, book them, brief them, do it all with photos, or else use someone on the ground to project manage for a fee (i.e. the rental manager can often do stuff for you for a ten percent surcharge.)
I just bought my fifth property and I will possibly be able to create up to an 18 percent return on “purchase price + 4k spent per unit on cosmetics”, or even 20 percent if I furnish the properties – which has an element of risk involved (tenants scarper with the furniture, as the bond won’t cover it-) so still figuring this out.
But believe me I won’t be there with my paintbrush. Don’t disregard the ugly properties, because you are missing out on $$$$$$ if you only buy the pretty ones.
cheers-
Minijoy to the world
No scared off – been a little busy with my 9-5 job.
What i was looking at is a Quest apartment in NZ – been going through the old threads and found the biggest concern is an exit strategy, the cost of replacing the furniture after 5 years, and some talk about quest able to not manage it or something like that after the initial agreement period.
Does anyone have experience with Quest and if so what has happened after the original 2 year guarantee period is up? Re exit strategy – if the net returns can continue doing what the 1st 2 years are guaranteed to do – ie pos cashflow for me – then I’m more than happy to hold on to it for future income (understanding that sometimes circumstances force your hand)Using Joffas calculator all figures look ok. its just what happens after the 1st 2 years that i need to investigate now.
Cheers
PropertyPlus
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