Hi guys, could anyone explain to me what a serviced apartment is & what pooled income is? I am looking at another property that has a long term managed lease in place with the above info. supplied to me but am unsure exactly what it is. Does this sound like a good investment, & is it more risky than normal residential property investing. Yhanks for your help. Nathan[
]Hi Nathan,
you may find some valuable info by searching for serviced apartments in the search function. There have been several lively discussions regarding this type of investment with most opposed due to it being a niche market, high mgmt fees, difficult to sell.
Hi Nathan,you may find some valuable info by searching for serviced apartments in the search function. There have been several lively discussions regarding this type of investment with most opposed due to it being a niche market, high mgmt fees, difficult to sell.
Thanks Polar Bear, will check it out.
Nathan[8D]Nathan, just quickly.
A serviced apartment is similar to a hotel in that all furniture, linen, crockery, cutlery (I think the crockery bit) is supplied (by you), for a higher rental.
Pooled income is where there are many such units/apartments, and a management company who looks after them. Say there are 10. If only 6 are rented for the week, then it doesn’t matter if yours was or wasn’t, you would get 60% of the income.
Cheers
MelFrom what i have found out the banks are very reluctant to lend against a serviced apartment, so if you intend to use it to borrow against later better check this out.
Regards
CreachHi Nathan,
We have a 2BR holiday unit in FNQ from which we get pooled income. It is managed by a good onsite manager who paid considerable money for the management rights – it is his income and he is there working you may as well say, 24/7. We paid $95000 for the unit (includes all furniture, whitegoods.) The income is seasonal and can range from say $500pm to currently $1500. Not all the units in the block are in the ‘pool’ and we have just let ours our through the onsite manager for $250pw. With the pool, you have other expenses such as I think 17% commission, room cleaning, linen hire & clean, electricity, Pabx hire, advertising, audit, Austar, etc. It’s quite a lot and of course as well as the income from the units that are rented, all these other expenses are divided among those unit owners in the pool.
Income goes down from around now, is big in winter, that is up north where our unit is. Even though ours is OK, I would not recommend this type of investment as it is surely better to get a consistent income. The onsite manager would not be impressed if the unit were to be let by an outside agency either as he would lose income.
On top of the expenses, you also have B/C and rates.
Anna
Hi Nathan,We have a 2BR holiday unit in FNQ from which we get pooled income. It is managed by a good onsite manager who paid considerable money for the management rights – it is his income and he is there working you may as well say, 24/7. We paid $95000 for the unit (includes all furniture, whitegoods.) The income is seasonal and can range from say $500pm to currently $1500. Not all the units in the block are in the ‘pool’ and we have just let ours our through the onsite manager for $250pw. With the pool, you have other expenses such as I think 17% commission, room cleaning, linen hire & clean, electricity, Pabx hire, advertising, audit, Austar, etc. It’s quite a lot and of course as well as the income from the units that are rented, all these other expenses are divided among those unit owners in the pool.
Income goes down from around now, is big in winter, that is up north where our unit is. Even though ours is OK, I would not recommend this type of investment as it is surely better to get a consistent income. The onsite manager would not be impressed if the unit were to be let by an outside agency either as he would lose income.
On top of the expenses, you also have B/C and rates.
Anna
Thanx heaps anna for all of your thougts. I will have to sit down & really think about this one. Thanx again, Nathan [
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