Forum Replies Created
Consider that if the sale price has taken a hit due to local market demand factors then could the rent income level take a hit also ? This could happen perhaps where there is a sudden increase in supply of properties.
Always better to have both if possible – CG potential and reasonably secure rent income.
Good luck
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Yes excellent question Devilz and if you don’t mind – Can we include plants or landscaping in this question please ?
Certainly not cheap and perhaps could be depreciated as well ?
Anyone know ?
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Please PM me the same 3 BAs in those 3 cities.
Can you post them openly ? or not appropriate ?
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi Joe.
Just trying to compare and clarify here.
So you borrowed 85% to buy the motel, 15% deposit ? Who financed that ?!! Min 50% deposit in Australia, higher at the moment.
And now the passive return is 8% ? Usually min 9% in Australia.
Your situation is a bit confusing sorry, but appreciate all the info, will try to piece it together.
Hope it continues well for you.
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi Joe.
Thanks heaps for the info, always very interesting to get the US perspective.
Just for clarification, the investment type you’re talking about in Australia is “freehold under management”, not passive, meaning you own the freehold, (there is no lease,) and you operate the motel under management – with managers.
The typical regional return in Australia is 15% less managers cost, which varies with size of motel and responsibilities and ease of management. At a guess, the return on a $7m B & B motel with no restaurant in Australia after paying managers is circa 13.5% and there’s even better buying at the moment while banks are playing tough with finance. Not sure where or when you looked but they’re here.
Good luck with your US motels.
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi Joe.
Welcome to the forum from me as just one of the many members here.
What’s an LLC ?
What type of ownership do you have ? Leasehold under management ? ? Freehold under management?12% sounds like a good return, is that rent or nett profit?
Is it based on buying distressed property during the GFC ?
Can the return be duplicated now ?
What area of USA is the investment and can you describe the motel ? Cost ? Rent ? Restaurant? Star rating, number of rooms ? Clientele?
Australia typically returns about 9% passive for a landlord in regional areas away from the coast.Any information would be very interesting.
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi Tony.
No motel is always 100% but if rarely, why ? .
But depending on the market position and condition of the motel, it’ll do better with new rooms.
New ones are usually min 4 star unless that’s overkill for the area market.
He could either upgrade refurbish existing to match the new or have split star ratings to cover a wider market,
but all depends on location and market.
New motels take about 1.5-2 years to reach potential, provided correct marketing done right.
Tenant will get increasing returns over that period.
Can be dual key, or incl apartments.
Existing entry driveway / backup space can service both.
Good luck
Cheers
crest133thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Got any pics when it was furnished ? Also suggest you add the split now while it’s vacant to enhance its appeal and avoid installation disruption for the next tenant. “Electric wall heater” doesn’t appeal due to running cost and warming weather. Mentioning “new blinds” makes it sound like it’s one of the unit’s best features, even though you may have spent heaps on them and they’ll look great up close. Top floor location ? Stairs? Maybe put an arrow on the external pic to identify the unit. Better pics always increase enquiry rate. Block of ? how many ? Demographic of neighbours? HWS type ? Storage ? Hope it rents real soon.
Good luck
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
As just another forumite, welcome to the Forum, which is full of helpful friendly people and lots of amazing information and hope you enjoy and appreciate it all as much as I have.
cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Suggest you inspect the property asap and talk to the tenant to find out what they have paid. From what you have said, you have cause to change managing agents without notice as their breaches of the managing agency agreement and the law are serious. Surely Dept Fair Trading will want to audit them without delay if you pass on this information to them. There may be other property owners not being paid.
Good luck
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Why does geographical location matter ?
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Do you think a sub 3% return is attractive ?
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi Ryan.
Simple to structure the termination for say end of month so REA can wind up same time and do a full accounting to your Dad.
REA needs to write to tenants to advise change of rent situation so thet don’t pay the agent again after termination.
Then get copies of all docs and rent records and all inspections reports and letters and correspondence with anyone by REA on Dad’s behalf to complete his files.
Hope it runs smooth.
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi all.
Another shire guy, grew up on a Gymea Bay waterfront, how lucky can u get !! The Shire seems to have everything except a University. Surely can’t be any spare land left except on the fringes.
Any cons ?
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi Philfella.
Relief Managers can take over management of a motel for you until the lease is sold.
It is a buyers market at the moment.
Take your time, keep searching and learning, the right one will turn up.
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi Dezability.
Could you approach the agent you bought the property from ?
Also see the other agents in town even if they’re small and less significant.
Send a direct email asking all agents under what conditions they would manage the property.
Ask if they would like to sell the property for you when you decide to sell it.
How far to the next town or REA ?
Sounds sus though.
Good luck
Cheersthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi PropertySourcer.
Send snail mail, it’ll probably have a redirection order on it and should reach the owner somewhere.
Ask Council.
Good luck
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi Philfella
Like any investment building, factory, shop, office, residence, the condition of buildings varies and the rate of deterioration varies.
Not sure what you mean by building upgrades but any alterations of a cosmetic nature are usually the tenant’s cost. Structural repairs are the landlord’s cost.
Haven’t heard about 2 1/2 years turnover with motel lessees, thought it was more like 5 years. Source?
9% ROI does not include buying costs as you mentioned, they vary so factor them in yourself, like any commercial investment.
If you self manage, yes there would be landlord involvement and monitoring compliance same as if you self managed a factory, office or residence.
Capital gain exists unless you buy poorly in whistle stops.
Unlike other investments, if the tenant does a runner, the landlord usually makes a killing.
The landlord involvement is in direct proportion to the quality of the property and tenant.
For most control and least drama, select and buy a freehold in excellent condition, create a carefully planned lease, sell it only to an excellent tenant, and treat it as a partnership.
Good luck
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
At only 7% ROI, sounds like 7 rooms is too small a number to get a decent return on costly infrastructure and a valuable piece of land.
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
What about that stuff you paint on and it removes moss over a few weeks ? Anyone used that with success? Forget what it’s called.
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
