All Topics / Help Needed! / buy licensed rooming house

Viewing 8 posts - 1 through 8 (of 8 total)
  • Profile photo of Melb InvesterMelb Invester
    Participant
    @melbinvester1
    Join Date: 2014
    Post Count: 38
    August 23, 2014 - 8:49 pm

    Hi all,

    anyone invest in licensed rooming house? There is a property got 7 rooms and 7% return of Income. But not sure what are the rules and regulation for these type of investments?

    This is closer to the University in Melbourne.

    MI

    Profile photo of thecrestthecrest
    Participant
    @thecrest
    Join Date: 2004
    Post Count: 992
    August 24, 2014 - 9:44 am

    Hi MI.
    In your plan, is someone going to live-in and run it and on what payment basis ?
    Cleaners? Maintenance ?
    Cheers
    thecrest

    thecrest | Tony Neale - Statewide Motel Brokers
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    selling motels in NSW

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    August 24, 2014 - 7:11 pm

    Going to need deep pockets to fund the deposit as lenders do not like this type of security post Childers.

    The other consideration is insurance as this will eat into your gross returns.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of Melb InvesterMelb Invester
    Participant
    @melbinvester1
    Join Date: 2014
    Post Count: 38
    August 25, 2014 - 9:06 am

    Hi all,

    This Property is 650sqm and in a good suburb with the Median of 850K
    So future i can knocked down and build the new house.

    In this case i thought getting 7% is bones compared to buying in this location?

    So Bank will treat this as commercial?

    MI

    Profile photo of Jeff123Jeff123
    Participant
    @jeff123
    Join Date: 2012
    Post Count: 31
    August 25, 2014 - 1:19 pm

    I’d say bank will probably treat as commercial given that it’s a going concern, and Richard Taylor is right, the insurance will eat into the majority, if not all of your profit. Not something that I would personally look at but do your DD, it may be something you’re prepared to do.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    August 27, 2014 - 1:23 pm

    Being a Commercial property doesn’t necessarily mean you get charged a darn site more just means you will need a greater deposit to start with.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of TheFinanceShopTheFinanceShop
    Participant
    @thefinanceshop
    Join Date: 2012
    Post Count: 1,271
    August 27, 2014 - 4:51 pm

    Definitely commercial – the contract of sale should have “boarding house” listed on the front page.

    Is there an existing agreement (not expired) in place as this will be quite important.

    TheFinanceShop | Elite Property Finance
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    Residential and Commercial Brokerage

    Profile photo of thecrestthecrest
    Participant
    @thecrest
    Join Date: 2004
    Post Count: 992
    August 28, 2014 - 7:11 pm

    At only 7% ROI, sounds like 7 rooms is too small a number to get a decent return on costly infrastructure and a valuable piece of land.
    Cheers
    thecrest

    thecrest | Tony Neale - Statewide Motel Brokers
    http://www.statewidemotelbrokers.com.au
    Email Me | Phone Me

    selling motels in NSW

Viewing 8 posts - 1 through 8 (of 8 total)

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