Today I just finished the plans for council approval, for an organization that cares for disabled people. If you take away the service part of that business it is a standard building with a few extra tweeks.
It got me thinking there could be a role to play for a property investor/developer for the building side and lease it to whoever takes care of the services side of things. There would be long leases with minimal vacancies (my opinion). This model could be used not just for disabled people but for the elderly/seniors and nursing homes etc.
So I guess my question is does/has anyone out there have investments like this or toyed with the idea? Interested to hear your thoughts.
I dont have any myself …but i have helped finance a few of them; one currently in place for a block of 26 units near USYD.
The most common transaction are investors and builders buying warehouses that are mixed zoned uses, converting the warehouse with high ceiling to boarding houses, student accommodation, units, age care , child care etc…
It does make money, depending on location most of them gross rental return of 11%-17%, from my experiences this is what i find;1. Most are charged at commercial rate; 9-10%…so this eats into the rental return quite a bit
2. The building must have the right zoning and council approved for the right uses; cost of $10-15k
3. expect to spend a bit on professional services to make the place “livable”
4. older buildings are not design for multiple residency – so massive structural and design change in term of fire proofing etc..Def not someting for the newbies.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
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