Hello to everyone
Just getting started and we have come across an Apartment for sale in a Resort complex in Cairns north Queensland. It has a lease with the resort until Nov 2008 which ends up costing us $40/week after expenses and then the RE agent says we can increase the rent to bring it in line with the others and then it will be making us a profit.
Does anyone know of any pitfalls that I should be asking about?
Any tips about dealing with Body Corporates?
Do I have to worry about the resort not renewing the lease?Hi Aroverman,From someone who lives in Cairns and has invested in most Australian states one piece of advise I can recommend you check out is council rates. Make sure you undertake a call to Cairns council and get an estimate of the annual rates. Don't just rely on the real estate agents word… or you could be in for a rude shock…I find Cairns council rates the most expensive in Australia and for someone who has also invested in the NZ and USA, I can also say Cairns council rates are one of the most expensive charging councils in the world.Good luck.GeoffBHi aroverman,
See if you can buy the property subject to a new lease being signed at increased rent. This eliminates the risk that the resort not renewing the lease.
Secondly, be careful of the management fee and body corporate. These can be quite high and affect the net yield.
Thirsdly, signing a long term lease with the resort, may affect the capital growth prospects for your property.
Hope this helps.
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