Forum Replies Created
Thanks Terryw, that really cleared up the questions I had on the topic. Much appreciated.
So if I say purchase a property for $200,000. What formula or rule of thumb do I use to determine the call option price?
From personal experience, the downsides;
Very few banks like to secure serviced appartments for financing your next investment property purchase.
a) They ( Banks, you) sometimes have to give 3 months (sometimes more) notice of intention to sell to the the serviced appartment group (in a loan default situation). So the asset is not as liquid as a tradtional home.
b) Its a very narrow market to sell to as well. Usually when you sell, the remainder period of contract of lease is going to be transfered to the new owner.
In all the major capital cities, there is a over supply of appartments. Take that into consideration as well in capital growth terms. If the service appartment company goes bust, your “secure” rental contract means nothing.
A stumbling block maybe banks willing to touch you to finance your next property investment deal using the rental appartment as capital. Only bank ( in Adelaide) I can use is the NAB, they finance loans with serviced appartment as capital ( niche market for them).
Jason
