Hello everyone
Was wondering if anyone had any experience with child care centres and if there is anything in particular to whatch out for when looking to buy one.
What is the accepted average return that I should look for?
ThanksBooboo
I don’t have first hand experience jsut the story of a customer of mine.
Her & hubby (in Vic) were looking for an investment and her mother was approached by an agent in Qld and mentioned this to her daughter. So they looked into it and the numbers stacked up … I dont know any details of the numbers so my answer to that part of your question really is up to you … The considerations for her were that the centre had low numbers and a poor image. They worked hard at improving the centre and the image or perception to now be a sort after centre. They found thisout by asking locals what they thought of the centre and went into it eye open with a plan, I think it helped in teh negotiations too.
Cheers
Leigh K[
]Carve your own path and lead the way …
Thanks leigh for the reply.
I am specifically buying as an investment only and NOT to run them .
Hoping to here from someon ewho has invested in them.
Boo BooHi Boo Boo,
I can’t help you with %return to look for, however a year or so ago we looked throughly into building one in our town, (although after doing the figures didn’t go ahead) and the rule of thumb is that a centre must be over 60 places to be viable.
Hope this helps,
Del
Hi BooBoo , just thought id throw my two bobs worth in,[:p] Came across one in Perth last week which is getting all sorts of flak because the dumb asses built it right next door to a rough pub [V] so you can imagine the flak there getting and i doubt if to many parents would be willing to leave there young kids there to play with the winos next door[V]
I thought I was wrong once, but I was mistaken !
It is harder to get a loan for this type of specialty property, especially if it can’t be readily converted to be used by other industry. Lenders worry, if they have to foreclose they it would be harder to sell.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Booboo,
Look at the use clause within the lease and the rent review mechanisms. Working for a large landlord with which owns a child care centre, the review mechanism was to market and CPI in alternating years. My experience has been that it is difficult to obtain market rents for child care centres and that rentals are generally lower than what is achieved say for commercial office rents.
Good luck with the investment.
Cheers
Prop ProThanks for the replies.
I am looking at a couple and the returns are 11% and the other is 8.5% with the leesees paying all outgoings .
Is this a reasonable return or should I look the pay a bit less and increase the + cashflow.
Boo Boomy only experience is bring my child to the child care centre that’s all. May be I should buy one and put my child in there.
Warm Regards
ChanDollars
[Keep going, you’re nearly reach the end of financial freedom]
]
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