I’ve come across an investment opportunity that’s got estimates of positive gearing for 50% occupancy. It’s due to be completed in 18-24 months, and I was curious what people think with regard to the accuracy of these type of estimates, and whether investing in serviced resort apartments is a reasonable first investment property buy.
What town / suburb is the apartments in? WS Coast
or actual WS Islands? Very nice area for holidays.
Not sure about permanent living with job
prospects and all.It’s on the coast, at Luguna, which is going to be the location of an international airport by the end of the year. The main market’s apparently conventions and conferences (at already existing conference facilities that are already booked solid for 4 months next year), as well as some golf tournament participents/spectators
ok, sounds good on the surface. Where did you
get all the info from (City Council, the Developer). Have to be careful with things
that may happen in the future. for example in
Sydney a lot of people baught houses in Carlingford
area because they were going to make a train line
Paramatta > Carlingford > Epping, but the Govt
scrathed it off the plan / budget.Agree it does sound promising but if you are lending to buy it can I suggest a couple of things:
1. Make sure the apartment size is greater than 45 m2 living area (ie without including balcony or carport)
2. Try to ensure that it’s a pooled rental, equal pay arrangement, and that the room rental rates and manager’s fees don’t seem exhorbinant
3. See an independent broker as well as any financier the developer/marketers direct you to, and preferably BEFORE you sign anything or hand over a deposit.Reason being – serviced apartments anything more than 6 months till completion are v v hard to convince normal lenders to touch, especially if income is per room only, and you may be caught in a non-conformer paying about 2% higher than the crowd just to get into the deal, and if the property value ‘slips’ after they’re built it’s very hard to finance out of these deals.
It’s a beautiful area, 50% occupancy should be more than achievable and you may be on a huge winner!
[
]
MelThanks everyone for the feedback – if anyone has any other tips or suggestions about this, please keep the thread running. The floorspace is only 30sqm plus balcony (Could someone explain why it should be at least 45sqm – ie is it a huge problem that it’s not?), but it’s definitely pooled rentals, and it’s a development on the mariner there so the location seems alright. The development website is http://www.lagunawhitsundays.info/m if anyone wants to have a look and give anymore feedback.
Thanks again
Cheers
Any other comments or feedback on the suitability of this investment for me would be greatly appreciated.
Thanks
When you own a room in a hotel, or resort, what happens when the business goes under? or the managment is poor?
2nd question. What happens to your property value when the sales people have sold all the units and the promotion of these units stops.
I’m not a big fan of these type of deals. I know of some of the best resorts, in prime locations, where you can buy a 2br unit for $65,000. This is beacuse the management in place does not manage the complex in a way that maximises the return to the owners of the units.
need to make up your own mind, but I would suggesst there are cash flow + investments in that region that would give you far more control of your asset. I settle on one, 8.5% rental return, next week (won’t name the town, but its in that region)
Slum Lord
]
The topic ‘Whitsundays coast investing’ is closed to new replies.
