Hi everyone
Any opinions on these types of properties?
Managed holiday appartments, net return of 5%pa – no Body Corp fees or outgoings – the management group pay for everything and give you a guaranteed return.
Ask how long the 5% net return is gauranteed for.
There are also charges for maintenance and 101 other things that can erode this return.
Magnetic Island is one example. (Promises 7%)Abbee,
The management group will dictate the return once guarantee has expired. You need to satisfy yourself that they have the experience and credentials to deliver. Do they manage other similar investments? What is their performance on those? Who owns the Group. Due diligence required on the management company.
Banks will not lend you as much compared to a normal residential property.
From a tax perspective, if you intend using the property for any time of the year, you will need to apportion back your expenses to the time the property was available for letting.
If the complex is almost all holiday letting, then re selling, you are essentially limited to selling to other investors, not owner-occupiers. Limited market for your property.
You are also exposed to the strength of demand for tourism in the area and more broadly within Australia. Holidays tend to fall under discretionary spending, so any potentail downturn in the economy would impact on tourism in general moreso than residential property returns IMO.
James
Hi All
Thanks for your comments – gives me some food for thought.
In addition to my previous questions, the property is managed by the Accor Group.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
