Has any one invested in a unit / apartment in a resort and allowed it to be rented out via management rights for holiday accomodation rather than a normal tenancy arrangement.
I am looking at one on the Gold Coast and the resort is averaging 80% accomodation pa and the cashflow appears very attractive. I am not sure about capital growth as these units are only two years old.
Any comments / advice appreciatedHelmut..
For my 2c i’s a great ‘ob’ for te people who have bought the managing rights to the complex, at one i looked at,they charge you to clean after every tenan (even if it’s you) new linen every year, new this and that, they hoose and sometimes ahve deals going with handymen for repairs..it’s all incestious to me.
But then again, i don’t own one so can’t offer any ‘real’ eperience.
Check out all the pro’s and con’s….
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorHi Helmutb
80% sounds pretty high, and high occupancy is only a small part of the equation. Redwing is right, get a list of all the costs – over the last 2 years, and projected and planned costs over the next 2 years, high occupancy creates high wear ‘n’ tear. Is it tired yet ?
I remember inspecting a place mid north coast NSW had very high occupancy, turned out it was owned by a Sydney footy club and it was supplying cheap accommodation packages to members as rewards.No wonder it was busy. Do ALL the sums. Good luck.
cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
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How about $70 to change a light globe ???
Don’t buy the Unit try to buy the management rights.
Very lazy investment strategy.
dont do it!!!
I agree with aussierogue
Terryw
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North Sydney
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I looked into this as well – it sounded OK until you dig deeper and find out all the hidden expenses, to name just a few:
window cleaning, pabx levy, mattress protector, shower curtain, advertising, managers commission, cleaning, service, linen, repairs and maintenance, drycleaning, postage, credit card transaction fees, sinking fund, locksmith etc etc etc, the list can be huge AND that’s just in one month!! I’m quoting directly from a printout I received on a Unit in Qld.
What looks good in the first instance, can look pretty bloody sad after you do your due diligence.
My advice, forget it, there are much better deals.
[suave2]for me the main thing is the lack of control. a friend bought a unit in port douglas and the manager owned 5 of the other 10 units. these were always full and yet my friends languished at at 50 pct. the managers appparently getting kickbacks from the tradies and local electronics dealer etc etc – very messy not worth the trouble…
I am REA in Noosa the holiday unit capital in Aust I think. It is my opinion that this type of investment can be bettered. A large number of Investors buy this type of unit because they happen to be on holidays and feel great and want to own part of paradise. My first question to anyone who asks me about Holiday Let units is “Do you want investment return or a Lifestyle investment. Some people do desire the latter…. You can do very well in Holiday Units but you have to buy right and sell at the top. Returns are ordinary – Growth can be fantastic or really ordinary, so it becomes extremely important that you seek oout the right advice For help in the future
[email protected]
Derek
Happy to adviseI’m with aussierogue. I think it’s a lazy way to invest and also you don’t have much freedom with this type of investment.
Kind regards,
Smart CookieT (02) 9501-2531
F (02) 9501-2541
M 0408-440-453
W http://www.smartcookie.com.auIf the building is managed by a big management rights company whose name includes a number, then a word of caution – avoid them like the devil! As others have mentioned, they will screw you over with all types of expenses you never imagined. At the end of the day (after body corporate fees and council rates)you’ll be lucky to get 2.5%.
And if you decide to take it out of their letting pool so as to put in a permanent tenant, they will absolutely make life miserable for you. Agents will have a nightmare trying to get access to show the apartment to potential tenants.
Their objective is to keep the number of units in the letting pool high, rip the owners off, and keep their shareholders happy.
Juan
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