I am looking at investing in an aged care unit. They are 1 bedroom and designed for indepentdant living. There are 50 units in the complex in an area (qld) where there is a rapidly aging population. The property is positive cash flow. The company doing the development is Oxford crest pty ltd. Does anyone ave any advice or experince in this type of property?
Hi Kylie,
Here is a topic which covers the question you were asking.. hope it helps..
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=9748
Alternatively, try the search function!
[cap]
Cheers,
Jay
**********************************
You must stay pOsitive
…then the cAsHfl0w will come!
**********************************Hi Kylie,
well – what can I say…I just settled on an aged-care unit 3 weeks ago. They can be a bit pricey at times.
A warning – be very very careful and cautious. There are many hidden costs involved when comparing to purchasing an average residential home. Give the contract to your solicitor and ask them to go through it and put in writing all the costs involved – especially, ask about the ‘Deferred Management Fees’ – these are usually quite high – ranging from 5% to 25%. There is also Retirement Services Costs involved – usualally 2-3% for every year you own the unit which is payable in total upon selling the Unit.
If you have any further questions, just ask…
Kind Regards,
George.“If You never never ask, you’ll never never know”
Long Term Kylie, with a rapidly ageing population I think you will go along toward creating some wealth for yourself.
The body corp fees must be pretty high though aye??
Where in QLD in this development?Sustainability by 10%
Kylie,
Hi, Did you invest in the property? I am currently looking into some units with this company, are they ok, have you had any hassles.thks
DavidHello Kylie,
I am currently waiting for completion of their Strathpine complex as I have deposit on 2 units as investment. Unfortunately, I have been waiting since late 2003. They have had no end of trouble in all areas and completion is still not due until late this year.
In my case it has stalled a few things as deposit being held in trust I have not wanted to adversely affect my borrowing capacity + fact these units are not easy to finance, particularly through major lenders.
I am not too worried as I believe these units will be beneficial in long term and am looking at others through Oxford Crest & another complay in Victoria.
The positive cash flow after deductions is good & I say go for it.Bye,
ReaganR. CASSELLS
Originally posted by RCCASSEL:Hello Kylie,
I am currently waiting for completion of their Strathpine complex as I have deposit on 2 units as investment. Unfortunately, I have been waiting since late 2003. They have had no end of trouble in all areas and completion is still not due until late this year.
In my case it has stalled a few things as deposit being held in trust I have not wanted to adversely affect my borrowing capacity + fact these units are not easy to finance, particularly through major lenders.
I am not too worried as I believe these units will be beneficial in long term and am looking at others through Oxford Crest & another complay in Victoria.
The positive cash flow after deductions is good & I say go for it.Bye,
ReaganR. CASSELLS
Kylie – re units at Oxford Crest Strathpine. I am also waiting on completion of a unit at this development. Unfortunaley the latest news is that completion wont be until June 2006, which is 2 years late. I have emailed Oxford Crest and never had a reponse as to why the project is so delayed. On the other hand I bought in at $96 000 and I understand that the selling price is not a great deal higher.
I also have a unit at River Hills in Eagleby (Near Beenleigh QLD and managed by Oxford Crest) and it has run at almost 100% occupancy since I purchased it. The property managers there are very professional.
They are a good invesment as they are relativley inexpensive to purchase and produce a good cash flow. From recent sales figures, the prices are also increasing and there will never be a shortage of tenenats.
The only thing to note is that their management fees are higher than some others in the industry (apparently) and the continual high increases are in the contract that you sign. Stewart, Silver, King and Burns are body corporate managers who have some experience in this area.
Have you had a look into finacing your purchase? Often these types of investments look good, in terms of cashflow, but if you cannot get financing at a decent LVR then you can quickly find yourself running out of equity for further investments. I’m not trying to put you off, if equity is not a problem for you such an investment might suit, but make sure you look at the whole picture and be sure the unit will help you reach your goals, not hinder you.
Regards
AlistairHi all,
I am with Alistair with this.
Retirement villas are a niche property and as such lenders generally see them as riskier investments hence their typical LVR is below 80% (having said that things MAY change).
For this reason a retirement villa may make a ‘good investment’ for someone who is wholely and solely chasing some form of cashflow. They do as Alistair said suck up more than their share of equity and I for one question their long term growth potential.
It all comes back to clealry knowing where you are headed with your investment plans and approach and then considering each property in terms of whether or not it is helping or hindering you achieve your aims.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958How much is the net return?
I have been doing some research lately on low-care retirement units, because I saw benefits of these investments (before I did adequate research).
While the purchase prices are reasonable and there are high occupancy rates (close to 100% in most villages with a waiting list), and these units are fully managed so no worries for the investor, the outgoings can be enormous.
What kind of net return will be left? 6.3% At the most?I think these units will only just make it to be positively geared if you’re in a high tax bracket and if you rely on depreciation.
Be careful that the marketers/agents do not give you the return figures based on the original purchase price if you are buying a unit that’s up for secondary sale!
One other thing that I found out about is that although there is high demand right now, because elderly on a full aged pension are being adequately subsidised with the pensioner paying no more than 30% of their aged pension in rent, and the subsidies are automatically being paid to the management of these units…
…
the state government have the right to reduce the number of subsidised tenants by 10% per year (effective from 2004). Although the govt have advised they will not take the subsidy from any existing residents, new residents will not be offered a subsidy upon entering the villages.This, I figure, will mean that the villages, to remain fully occupied, will have to market and advertise much more to encourage residents with the financial capacity to stay in the village without requiring the support of the state govt subsidy. If they reduce subsidy by 10% every year, in 2014 there will be no subsidies left.
I have at least two issues with that:
good, safe, affordable housing should be available to ALL elderly people, not just the well-off ones.
Secondly, how many well-off/rich aged pensioners are there? Even if there is a good percentage of well-off elderly, these people have more options of different lifestyles apart from living in a retirement village.As for marketers advertising these units as being in *High Demand*- yes true- they are right now… but what about in the near future, when the elderly on a full aged pension cannot afford to live in these villages anymore? I wonder if there still will be such high occupancy?
I do not want to sound like a (re)TYRE(ment unit) kicker, hehe but we need to balance the good and bad about an investment, taking into account not just the investor and tenant of today, but also of tomorrow before making a decision we are happy with. [buz2]and[inlove]
Celivia
Kylie
I commented to you back in 2005. Did you ever buy a unit at Strathpine? I have recently had my purchase contract cancelled and am wondering who else is in the same boat
Hmmmmmmm positive cash flow aged care units perfect i have been looking for exactly that in my state of late, sounds good so do your due diligence and if it all adds up go for it, Happy investing
To IJO,
How did you manage to cancel the contract? What reasons did you give? We have been trying to get out of this contract for about a year, and are constantly being stalled. Did you lose any of the deposit?There is an article in yesterdays Courier Mail 31/5/08 warning people about buying into retirement units.
Its a very good read
kate… can you paste the article for us to share?
cheers
DonaldIt was in todays Sunday mail not Courier mail
Retirees warned of resort pitfalls
I'll see if I can scan it. Do I then save it to photobucket?
http://www.news.com.au/couriermail/story/0,23739,23787967-952,00.html
Is this the article you mean?
Elka
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