Serviced Apartment – Owner Occupied

Hi all,

I’ve done quite a bit of reading and understand the general pitfalls of investing in a serviced apartment. However I can’t find much information on Serviced Apartments (SA) that can be owner occupied. I understand the potential risk with SA but if avoided and picked carefully I’m still optimistic that a big gain can be made. For example, I am looking at a few SA whose lease expires in 2 years. It is over 50sq metres in size and is situated close to public transport. It is priced at 300k but similar residential apartments near that suburb go for about 450k.

Is my optimism naive or am I right in that there is a high risk/high reward potential with SA if navigated properly? If there is high risk but high reward, what are the key factors that I need to consider? Would it be the following below?

– Ensure that the SA can be owner occupied at end of lease or within 90 days of purchase?
– Ensure that council zoning will allow the SA to be used as a residential property?
– The block of land has a high number of owner occupancy?

I guess I’m looking for advice to say YES there is potential as long as X factors are right, or a NO that SA cannot be converted to a residential property with residential-like capital growth.

Thanks!