Hi all. Have just had a chat with a lady who is trying to sell me on the idea of investing in a serviced apartment in Mildura. Thought I’d run it by you all for your thoughts as the idea is new to me[
]The offer is to buy a serviced apartment for $95000 plus settlement costs.Returning 7%p.a. increasing by 3%each year. Finance at 5.99% with a 70%lvr. Outgoings nil as the tennant pays those.Leased for 20 yrs. (5*5*5*5)Looks (at first glance) like a loan of $66500 Interest of $3983 p.a. Income of $6650 p.a.equalling positive cashflow of $2667 p.a.[] Have only spoken to the lady 1 hour ago so no due diligence done as yet. By the way she reps for a company called Better Finance, at least that’s what it says on her card.
Thoughts anyone?
P.S. Love the forums, browse here often.As far as the outgoings are concerned, it maybe a comercial lease, therefore they all met by the tenant. Serviced Apartment have no history for capital growth unlike traditional property. Make sure it is subject to finance and an independant valuation. What are the replacement costs with resect of refurbishment. I am sure there would be something written into the contract that you would have undertake these at particular times. As far as what you would hold one for… they are an excellent tool for reducing debt. All property should be seen as a tool and what you are holding it for and how is it going to enhance your portfolio… otherwise do you DD and go for it. Good Luck
Serviced apartments are hard to sell, and it is harder to get finance for (that’s why only 70% LVR).
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hiya!
I nearly purchased a serviced apartment in a very good area of QLD (before I came to this forum) and it cost me over $500 to get out of the contract. Banks don’t look favourably on these apartments. There are much better deals out there. Good fortune with whatever you decide.
Cheers
Sooshie []“Giving is a Blessing, receiving is the bonus”
Difficiult to finance, very difficult to sell.
Make sure you are not liable for replac. of furniture/fittings.Sooshie,
Actually it cost us $557 in solicitor’s fees to get out of the contract… [
]The most important lesson I had from that experience was that serviced apartments ‘might’ be difficult to sell at a later date… so if your counting on being able to access capital gains from this investment at a later date, then I’d say that is not a given…. however if you are satisfied with the rental returns and were planning to hold this IP for a very long time…
Cheers,
Michael.
Hi genises, I live in mildura so if you would like me to research the property for you I would be more than happy to help.However I will say my contact has indicated that serviced apartments are very difficult to rent here. My email address is either [email protected] or [email protected]
]The offer is to buy a serviced apartment for $95000 plus settlement costs.Returning 7%p.a. increasing by 3%each year. Finance at 5.99% with a 70%lvr. Outgoings nil as the tennant pays those.Leased for 20 yrs. (5*5*5*5)Looks (at first glance) like a loan of $66500 Interest of $3983 p.a. Income of $6650 p.a.equalling positive cashflow of $2667 p.a.[
] Have only spoken to the lady 1 hour ago so no due diligence done as yet. By the way she reps for a company called Better Finance, at least that’s what it says on her card.
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