Forum Replies Created
Hi To All Forum Members.
With the kind permission of the Administrators/Moderators here’s my coming out post.
Family, friends, contacts and acquaintances in the hospitality industry have been suggesting for a long time that I should take up the profession of motel broking, so I have.
As a result, Statewide Motel Brokers has been launched as our new family owned and operated business to sell motels in NSW.
I’ll still continue to assist forum members with information about motel investment and help buyers in finding a motel to suit their needs. However I will advise any interested parties if I have any vested interest in any property or would benefit from a sale.
Our website is new and will need at least 6 months of assistance by web developers to gain some ranking with the major search engines. Any recommendations of expert SEO specialists welcome.
Thanks again to the Administrators/Moderators and wishing you all great investing success in 2014 and beyond.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi Peter.
Welcome to the forum from me as just one of the many forumites.
You've certainly asked a lot on a first post.
There has been a lot of info posted on this forum now about motel investment so I suggest you read all you can and you should find many of your answers there already.
You need to know how much you can spend before anything else, and see if the income from that purchase would be sufficient for your purposes.
Note the different returns on freehold vs leasehold, coastal vs inland, and see if your projected income would be sufficient.
Sort out locations and preferences.
Sort out your SMSF options with your accountant or financial experts on this forum. There are some here with thousands of posts to their credit from helping so many people over a long period of time.
If you have expertise or experience in any area you might like to add some help into the forum yourself, what goes around . . . .
Reading heaps of leases and P & Ls is essential self education. Start creating some benchmarks, KPI, ROI as you go e.g. setup an excel template and express some important expense benchmarks like housekeeping wages, electricity, water, as a % of turnover, enabling you to compare apples to apples. List expenses for the last 3 years side by side and query any fluctuations.
The decision to buy a modern motel, one in good condition or one that's tired or limping will depend on your skills in reno or as a business doctor, and will depend on the bank, who may be reluctant to lend to a first timer on a limping business, or one that has more promise than profit. Cashflow is King, so too position position.
Freehold vs Leasehold. Consider the scenario of comparing buying one of 2 identical motels for say $500K –
one a freehold returning 15% ($75K p.a.), and the other a leasehold returning 30% ($150K p.a.).
Suggest you check out all the existing info and post here again with any further questions.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi Coldeskimo.
Sorry to be adding something so long afterwards, just found this question.
Obviously one for a good accountant. ATO may watch activity in this area carefully so best to get it right.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi Freckle.
I'm not an economist or an accountant or an investment advisor that's for sure.
True that currencies are manipulated and there may be a global currency in the future, certainly the Euro spread to some degree.
However, I'd like to regard something internationally and universally recognised as being of saleable or tradeable value as something the Australian banks or say CBA for instance would lend against.
What do you reckon the big 4 Banks' opinions are of the value of Bitcoins ?
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
As always, any "goldrush" is all about the timing, get it wrong and you're reduced to living in a tent in the Klondike.
For that reason we have avoided buying motel(s) along the NSW coalseam.
Prefer to buy in areas where there are diversified and sustainable reasons for the investment to continue to provide a reliable ROI.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
A valid currency is guaranteed by a stable sustainable Govt which owns and controls the matching committed resources to back the paper or coin or bits.
Why would you buy anything less or trade for it ?
In my opinion, Bitcoin is smoke, like a Ponzi scheme.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Someone owes you money. It's either your old friend or the REA. The Tribunal will work it out. You can also request that the Tribunal recognise you as a tenant with or without mention on the lease. Your friend should have a copy of the rent record so you can assess arrears if any.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Many moteliers are reporting surges in turnover last few weeks so expect P & Ls to show an unseasonal surge for this time of the year .
Finance at an all time low cost, banks keen for solid investment, record profits as usual, plenty of good motels on the market at the moment, should be a good time for motel investors. Hope you're all doing well. Our motel in Wagga is going just great.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
We received quotes from 4 valuers almost 2 years ago to value a 22 room motel. Prices to do the valuation ranged from $2,500 to $5K.
I'd strongly suggest you get one anytime, but even moreso when buying from a family member.
To be fair to both parties in a family deal, it's best to ensure you only pay $10 for a $10 note.
TerryW is on the money too BTW.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Scott is on the money.
Big land gobblers. Usual return of about 15% freehold. avoid anything with a shop, too much extra work. Parks with permanents cause headaches. If it's big enough for 2 couples there's a chance at alternating time off during quiet times. Many days on a whippersnipper and mower. Trade and or handyman skills so important, forever repairing something. Plenty of cash income. Relief managing is educational. We've managed 3 parks, that was enough.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi Mosiclandscapes.
If it's any compensation, (and likely the only compensation you'll get from this situation, ) – you're not a rookie anymore.
If there's nothing else of benefit or value there for you, then quickly move onward and upward with your new found hard won extensive knowledge
from the street school of real estate.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Very well written Mark & David. I saved it for future personal use.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi Investingyoung.
Welcome to the Forum from me as just one of the members, and I hope the forum is as much help to you as it has been to me.
Like others here who have a specialty, I have tried to place as much info at the Forum's disposal as possible so read all you can.
It's a 2 way street. At the same time, the forum members appreciate the interaction with new members so please feel free to contribute by making an introductory post about yourself and what you're doing with investment, or plans, or career or interests or qualifications etc.
In relation to motel investment, it might help to know at what level you are thinking of investing, your business experience and what you hope to achieve from a motel investment like short term, long term and lifestyle and where.
To partly answer your many questions ,
1. 30% / 15% (inland).
2. correct
3. minimum
4. correct (all other things being equal)
5. generally speaking, yes. depending on how the figures are displayed.
6. usually it's expressed as gross profit then minus some expenses you've mentioned to reach a figure called nett profit, but ask your accountant.
Quote " 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?"
Wow, Investingyoung, that'd be a huge exercise which my accountant charges me heaps for because it's so many hours of detailed work. But suffice to say, with a leasehold where the nett profit is 30% of the value of the leasehold, then every $1000 increase in the nett profit actually increases the value of the leasehold by $3,300.
What are you thinking of doing ?
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi MosicLandscapes.
I suggest you contact the Tenants Advice and Advocacy Service or its Vic equivalent. Ask Fair Trading if you can't locate them. They are experts at handling bad landlords in NSW, don't know about Vic. Sounds like you have extremely overbearing underperforming agents and landlord. If you're moving out, compensation is all you can get. If you're staying, you could get Tribunal orders against the landlord for compensation, reduced rent, and even get orders that your rent is paid to the Tribunal and held by them until repairs are completed. Read all the orders that you can ask for and discuss the situation with TAAS and Fair Trading.
Good luck
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi Diehard.
Ask the CTTT or Fair Trading in your state about the problem and how to address the mediation and Tribunal process and if compensation is a possibility.
Feel like sharing the details here ?
Good luck.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi Xavier and LeanneB – any progress with your motel searches? Now is a good time to search as I feel the soft market may help lean things toward a buyer's market.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
What a great time to invest in a motel, the accommodation sector is a bit soft, even the coal areas are feeling the pinch, commercial interest rates are low, must be leaning towards a buyer's market. Hope all those with loans are pressuring their lenders for a better deal right now.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Unless you're experienced at PM or want to take the risk and learn the hard way, get help on this.
There are a number of vital factors in the rental equation like rent level, accurate and enforceable documents like lease, condition report etc, to name a few not all, but assuming those are in order, most important consideration is tenant selection which will render many other assumed advantages like rent in advance a moot point if you get it wrong. Unless you have skills in this area or a great well vetted tenant waiting, I suggest you pay a local PM to vet and select one for you using TICA the default tenant database, get all the paperwork done for you as well, get the tenancy setup correctly, observe it all closely for future reference, and enjoy the ongoing benefits.
Good luck,
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
We resurfaced our motel driveway with stencilcrete, charcoal with black flecks, looks great, but after a few years it lifts at the edges and joins here and there, and gets drummy in places anywhere water can penetrate, very difficult to get a 100% bond everywhere. But can be patched and painted. Stencilcrete over existing concrete takes weeks to complete properly, and is weather sensitive during some processes, so allow for further delays.
However, for tenanting purposes, I'd take less trouble and expense. Holes could be concrete filled, patched, painted or paved as a feature.
Good luck
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
4 weeks rent as a fee is more like commercial property.
Should be like first week's rent first lease, then half a week's rent for re-lets.
Check though on other costs like Tribunals appearances, warnings, inspections etc, get the whole list very clear.
Usually pays to have all properties with one PM, enables you to negotiate for better rates from a stronger position.
Also a very nice property in a very nice area attracts better tenants who are not so labour intensive for PMs so a lower fee is realistic.
Good luck.
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
