Forums / Property Investing / General Property / Over 55's Complex – Deal or no deal

Viewing 5 posts - 21 through 25 (of 25 total)
  • Profile photo of Kara47Kara47
    Participant
    @kara47
    Join Date: 2012
    Post Count: 28

    Tom,
    Hope it all goes well.
    Thanks for an informative and thought provoking post!
    Karen

    Profile photo of kengw002kengw002
    Participant
    @kengw002
    Join Date: 2018
    Post Count: 14

    Hi Tom

    did you end up doing this deal?

    And how is it fairing?

    I’ve just read over the whole thread, i’m left hanging ha ha

    cheers

    • This reply was modified 11 months, 2 weeks ago by Profile photo of kengw002 kengw002.
    Profile photo of TomTom
    Participant
    @tommyt
    Join Date: 2017
    Post Count: 28

    We sure did Kengw022. We purchased for $86K (220/w rent). It has been great, the tenants are great (we self manage), it was positive geared in the first FY as expected (we made $1,500 above all costs, including financing, rate, body corp etc).

    The last two units in the complex have sold for $95K each, so that represents a 13% capital growth in 12 months, but we aren’t selling so that’s only a paper profit.

    A positive side of this investment has been the tenants. When my wife met them, the first question was can we stay here until we die. When my wife said yes, of course, the tenants cried with joy. They have had 3 rentals in a little over 18 months (none due to their actions), two due to sales of the houses and one due to the council enforcing a usage rule (the houses were approved for short-term stays only). Having tenants this motivated to keep their tenure is pretty awesome, and there is a level of intrinsic happiness as the owner, knowing that this investment is providing such a great outcome to the tenants.

    Tom

    .

    Profile photo of JaxonJaxon
    Participant
    @jaxona
    Join Date: 2014
    Post Count: 282

    Mate so stoked and happy to here that for you Tom, great outcome.

    Profile photo of TomTom
    Participant
    @tommyt
    Join Date: 2017
    Post Count: 28

    A little update on the over 55’s investment. We have now purchased a 2nd unit, again for $86k, it is also tenanted for $220/w. Both of our tenants are very happy with the complex.

    On the topic of tenants, both units have tenants over the age of 80 in them (a single in one unit and a couple in the other).

    At this age the expected tenancy period is 3 years (according to the productivity report – https://www.pc.gov.au/research/completed/housing-decisions-older-australians/housing-decisions-older-australians.pdf)

    This report has been very interesting and helped me further develop a business plan for this type of investment, for example:
    – The primary reason people 65-79 move is to get a smaller/less expensive place
    – Older home owners are more likely to move into less expensive accommodation (our single tenant sold his home and moved into our unit – he is ‘rightsizing’ for his life (and moving closer to his kids).
    – Average tenure post the age of 80 is 3 years (the next move is either aged care facility or the funeral home!)
    – Around 10% of over 75 year old’s rent (my earlier analysis found that if only 3% of the population (over the age of 55) in this area required rentals that would be over 500 individuals.
    – The use of residential aged care is declining (This is very interesting, as the aged population is increasing. This suggests that older Aussies are staying healthy… leading to a demand for appropriate housing)
    – An increasing proportion of older Australians are choosing to move into age-specific housing (music to my investment ears)
    – A substantial proportion of older Australians are in the private market
    – 4.5% of older Australians live in Retirement villages and 7.3% in private rental

    And the biggest contributor to our investment confidence…
    – Older Australians who rent have low security of tenure
    – We offer 100% security of tenure, we are not going to move into the units (I’m only 40, so I am 15 years off even being able to move in!)

    This tenure issue is huge for our tenants, it is their number one question when they move in “Can we stay here for the rest of our lives?”

    My checklist for investment in over 55’s is based on findings like the following…

    As people age, their housing needs and preferences may change, both in respect to a
    dwelling’s location and its amenity. Generally, older people require dwellings that are suitable
    for their changing physical needs, with even surfaces, passages wide enough for wheelchairs,
    and appropriately designed bathrooms, toilets and kitchens. It is also important for the dwelling
    to be located close to services and facilities, such as medical clinics and public spaces, to allow
    residents to continue to participate actively in their community. Older people, particularly those
    living alone, are often concerned for their safety, and look for dwellings and communities that
    offer them a sense of security.

    My checklist is:
    – Hobless shower
    – No steps
    – Mixer tap at all sinks
    – Wheelchair accessable
    – Located near doctors
    – Located near shops
    – Surrounded by wide public pathways
    – No pool (I don’t want the extra cost)
    – Self contained
    – Well maintained and appointed common room (for family gatherings)

    On a side note, we have settled on a traditional 3 bedroom investment house this week ($230K – rents for 340/week), so we are getting some diversification in the portfolio.

    It is a great market at the moment, and we have purchased 3 investment properties in the past 18 months.

    I am looking at another opportunity at lunch today (3 bedroom – $200K – rents for 260/w), lots of opportunities.

    Tom

    .

Viewing 5 posts - 21 through 25 (of 25 total)

You must be logged in to reply to this topic.