hi – am looking at some seniors places (typically duplexes in complexes with on-site mgt) in qld. returns look good, however i am aware many lenders don’t like them, and presumably many investors also. would welcome anyone’s views on these as an investment… many thanks, john
Limited capital growth potential. If lenders don’t want to lend you money to buy them – it shows you how risky they view the investment. Let’s not forget they’ll happily lend on a lot of subpar investments, so you have to ask how bad the modelled results are for these types of specialised security.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
thanks corey – they definitely seem like a bit of a specialty niche. nice returns but the growth seems to be an issue i have heard about. even though with rent assisted pensioner tenants, still not sure where the biggest risks are for them and happy to learn from anyone familiar with them. good point about the banks being shy about them, just need to find out why… cheers, john
I own a lot (3 rooms) in a over 50’s accommodation. Returns $20000 – $24000 per year profit (yes after all fees). Bank wouldn’t lend so used capital from another property to fund. Great returns, little or no capital gains. Just don’t put all your eggs on the one basket!
Funny, I was just doing some research and i also found some seniors over 50’s accomodation. The ownder is trying to sell with a cap rate of 10% (fund from operation / total cost of purchasing the property). However, I did some research and found that the owner is taking a 40% loss on his initial purchase price.
I have examine past sale history in the lot and found that some took 1 year to off load the investment, the current owner have been selling for a year.
Right now I am also thinking if if the cash flow is worth the risk.
Funny, I was just doing some research and i also found some seniors over 50’s accomodation. The ownder is trying to sell with a cap rate of 10% (fund from operation / total cost of purchasing the property). However, I did some research and found that the owner is taking a 40% loss on his initial purchase price.
I have examine past sale history in the lot and found that some took 1 year to off load the investment, the current owner have been selling for a year.
Right now I am also thinking if if the cash flow is worth the risk.And that is exactly why lenders don’t want to touch them. Cash flow return for lender’s is not a risk mitigant that they care about – if they foreclose they need the property to sell, not rent out.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
thanks mikeden – having been in one of these, any top tips on what negatives to look out for?? thanks, john
thanks wadez – am in exactly the same position and the prices are historically a bit unstable for the one i’m looking at. however it would now be below build cost and this too is puzzling as it cant really go below this price – maybe?? cheers, john
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