Has anyone considered investing in motel/ hotels in Tasmania.It is possible to find properties in the 1-2M range that yield 8-12% for the freehold. the leasehold is sold to an operator for say 30 year term. My boss has 10M plus of properties and was advised that these properties are undervalued. The broker sources a deal for 1.8 % commision. These properties meet the 11 second rule. If the leasehold operator doesnt pay, one can always sell the leasehold on. A typical example would be a 30 bed motel for 1.3 M on 30 % deposit plus costs ie $440K and return of $150K less $85 K for interest = profit of $ 65K on $440K initial outlay ie 15% return plus possible capital gains.
Would Steve buy one good high yielding property for 1.5M or 20 cheap ones for 75 K if they both met the 11 second rule. Similar deals can be had in some of the larger population centres in Qld , and stamp duty and land tax is much lower. I am more interested in what a high net worth individual would purchase ie 10M plus, than someone with 10K or so deposit can buy. Does Steve still buy 50 -100K bargains in rural centres or does he invest in much more sophisticated arrangements that are beyond the scope of the average wage earner on 50K or so. It should be obvious that only one in a hundred average wage earners will bcome wealthy and only a small percentage of these will be financially independant ie 10 M plus, like my boss and Steve ( ??? ).I have read most of the reader’s comments on the forum, and feel that my boss ( and financial mentor ) has a better idea about wealth creation, than the contributers. Sure anyone can by 1 0r 2 or 3 houses in Moe, but they wont get rich doing this. Also who will buy them , when rates go up and the investors decide to offload these investments.
Any thoughts re. these ideas.
Regards Mike 127.[]