Hi all.
I have the opportunity to buy either a fully serviced apartment in a hotel complex, a small block of units and/or 2 small shops with warehouses attached. All appear at first glance to meet the 11ss and CoCR criteria.
I have no experience with these types of IP’s. Previously I have only purchased a strata-titled unit and houses. I would appreciate any advice on what might be issues to check out with these types of investments.
Thanks in advance.
Namaste – “God in me recognises God in you”Dear Namaste,
It is great to find a couple of properties that both passes the 11 ss. The two shops with warehouse may be worth considering because of the possibility of bringing you a higher CoCR. Outgoing expenses like rates and water are paid for by the tenants. Compare the sums on both properties.
Refer to Steve’s book 0 to 130 Properties in 3.5 years, page 86, on a similar experience. This probably answers your question best.
God bless,
mender
Namaste,
Serviced apartments – beware of high mgmt costs and the fact they can be a difficult investment to make a capital gain on and to actually on-sell.
Commercial – Remember that vacancy factor can be much higher in commercial properties so make sure you aren’t rent reliant to meet repayments.
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