G’day
I am considering buying a relocatable home in a Tourist Park around Melbourne. The marketing company (for the tourist park) is offering 8% guaranteed net return on investment. The bank will lend 70% against the investment or up to 100% if another properrty is secured against the investment.
Is there anything I would be wary of?
Is there much capital growth in it, say over a period of 3-5 years?
How is the market for resale?Any advice will be appreciated.
Ta, SanjivProbably you will have a very hard time getting finance. Therefore you will also have a hard time selling. And this will most likely limit capital growth. 8% is not very much return at all.
Terryw
Discover Home Loans
Parramatta
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I will second Terry here and say that 8% is pretty poor for an investment such as this. There are many better commercial investments out there in my opinion.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044Hi Sanjiv
Are you buying the land and building? Or is it just the building and the park is to rent it out? I had a similar experience with a caravan park. I owned the caravan and the park rented it out. It was located on their land. It was a good return as I remember, about 40% but I could not borrow against it.
At an 8% return it doesn’t seem enough to cover your costs and the building would depreciate as well. If you don’t own the land then there is little chance of capital gain.More due diligence required.
Mark
“Is this taking us CLOSER to our goal?”
find out why they want to sell these caravans coz it sounds to me like thay are trying to get rid of them
The problem is that lenders cannot use the relocatable home as security so most lenders will only lend on them if they have a mortgage over the land (which obviously you cannot do in a tourist park). Therefore you would have to borrow using something else as security or a personal loan.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
[email protected]
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