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  • Profile photo of investingyounginvestingyoung
    Member
    @investingyoung
    Join Date: 2013
    Post Count: 1

    Hi Crest,

    Thank you so much for all the great information and sharing of experience.

    I stumbled across this forum yesterday after someone had told me about the the general concept of motel investment.

    When I heard about the higher ROI when compared to traditional assets (shares, residential property, etc) I decided to do my research (GOOGLE) and I found your impressive thread. A thread which has lasted many years!!!

    Admittedly I have very little knowledge but I just wanted to confirm a few things I had learnt from your comments;

    1. ROI is highest on leasehold. (LH 30% annually vs FH 9% annually)

    2. If you purchase a leasehold you can either operate the business yourself or pay someone to run the motel for you (under management)

    3. You will need a 30% deposit minimum to buy a leasehold

    4. If you increase the turnover and nett profit whilst you own the leasehold you can then sell later at a higher price (Capital Gain)

    5. The nett profit = turnover – rent paid – business expenses.

    6. The nett profit is your income as business owner of which you then need to pay loan repayments, income protection, wages, super payments and tax, etc?

    Maybe I have some details wrong above and if you could correct me that would be great.

    If possible are you able to run through a sample scenario to highlight the numbers and cash flow from purchase to sale? Would be good to see how you can make money from purchase to sale and the income/expenditure throughout the years?

    If we use a $500,000 leasehold with a 30% ROI, could you show the cash flow if it was under management and also explain how you sell a leasehold if you have used 10-15 years of a 25 year term?

    Sorry for all the questions just very keen to learn and understand everything?

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