I am looking at purchasing a hotel/motel property, I was just wondering if people can advise me on their previous experiences with this type of property.
For instance if the property is fully furnished does this mean that you can claim some depreciation on the furniture?
How do lenders view these type of properties ie what is their deposit criteria?
Any guidelines/criteria to use in judging whether the hotel/motel is a viable succesfull business worth investing in?
Regards
Jose
Do you mean that you are considering a motel or buying a unit in a serviced apartment setup?
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 75% LVR***
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sorry I am considering buying a 1 bedroom unit in a motel.
Thanks
hi joe8080
bit of a difference.look back about 3 weeks and there was apost on the same issue and have a read.
that was a 2 br from memory and in the melb city.
any of these types of investments are look at on acase by case bases and are not the norm they have other cost that must be taken into account.once you have found the post and require more assistance post here or again and I will try to assist I am not one for investing in managed resort style or hotel investments unless the return is in the 15% and you only get those in the island outrigger resortshere to help
Outrigger is coming to Darwin for anyone interested in these type of units. When it comes to service apartments and motel units 1) do a good check on who is managing the property. 2) ask for a copy of the minutes to check if there are any future works plan, 3) try to contact people who already have units, 4) do a check on how many have been sold over the last 5-10 years to see if the value has increased.
C2
C2
Thanks for steering me towards previous posts on this topic.
C2 what exactly is outrigger and where do I find out more about this?
Thanks again
1 bedroom unit in a serviced block is an interesting financing proposition.
Many lenders will not touch them full stop however other vary between 50/80% depending on the size of the unit.
I have just financed 2 up at Bargara and we got 70% LVR on both of these.
I guess the question is if you can afford to put the 30% odd of equity in you will probably receive an above average return.
As long as you do not feel the funds could have been invested better elsewhere then go for and take your due diligence to the next level.
Cheers Richard
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Outrigger are a brand. There are Outrigger resorts all over the place – I think they might be a US company (possibly started in Hawaii)
Be aware that with many of these places the cleaning/laundry costs can absorb 15-20% of gross rentals. They never have this on the glossy literature.
ScottTax Depreciation Schedules
Australia wide service
1300 660033
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http://www.depreciator.com.auIt is possible, in some cases, to get up to 95% for serviced apartments. The rates start to get high as the LVR goes up, but if you can buy well enough you can make money out of these.
Regards
AlistairHi Jose,
I have jumped into PI buy buying Three Serviced hotel apartments one after the other. I have found it a good stepping stone with little to no worry. The second unit was a 20 year old building, at first I was worried but for the last 4 months it has been unbelievable! the other two I have to wait until the a year has passed so I can sell them (capital gains tax) But I am eager to invest in the second hotel again. It sounds good when you say you own three hotels! Especially if they are on Mayfair!!!
Now the worry. A couple of weeks ago I got a bill from the Darwin Power and Water company, now with these you only pay Rates & Corporate Body Fees, well now I got a water bill as I had 1 unit in this complex. The bill was for $41,000.00 [dead2]. What the & I currumba ?? I found that the owner/corporate body manager had not paid since 2002!!! So as I and others owned units in the hotel, we were responsible for the bill. But apparently if we can prove in a court of law that we have been paying the BC we can be cleared (??). But he has since coughed up most of the money. A bit scary.
But saying that the bank still wants to give me more money. But as well the NAB (can I mention them??) will not lend me any more for hotel units, I can not work it out as they can see that they are making money! Maybe they don’t like that!
Hope this helps.[cap]
Hi Jamiem, where are your service apartments in Darwin?
C2Rich in happiness and money is better than rich in money with no happiness.
My Father bought 2 properties in a serviced apartment complex in Brisbane. At first these worked quite well and rented solidly, achieving their projections. But… then the developer sold off the managment rights to a private individual. (look in the weekend papers – there are always management rights for sale). This guy couldn’t manage his way out of a wet paper bag, and he allocated booking to those landlords who ‘treated him the best’. He also was charging high cleaning / laundry fees, but on a surprise inspection was found to be simply washing the sheets in the washing machine in the apartments.
Both units were sold for a small profit, but the lesson is : management will make or break these types of investments, and you as an owner will have no control over who buys the management rights. This lack of control makes the risk factor higher.
(ps my signature is not sour grapes against this as I was personally not involved)
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