Hello I am new to this forum, but wanted to see if anyone had any experience or advice for investing in resort apartments.
My husband is a big wine buff and always talks of getting a weekender up in the Hunter Valley NSW.
There are quite a few apartments that are reasonably priced within the Cypress Lakes resort as private strata apartments.
We would be looking to rent this out for the majority of the time as holiday rentals. We have actually stayed in one of the private apartments before for a friends wedding and it was a lovely stay, where you have access to the resorts facilities.
I am just concerned about all the complications and restrictions that may exist with being a part of a large hotel complex and the risks if they were to go bust, and hidden costs etc.I am just starting to research but thought the easiest option would be to start here and see if I could hear of any real experiences people have had with investing in a hotel/resort complex
Hi Vicenza – Welcome to the forum!
I have seen many of these – and personally I am not a fan. The key ingredients for success are Capital Growth and Yield, and with a ‘resort’ style investment, income can be seasonal and with the apartments of this style they struggle to provide capital growth. In the above – you are making an emotional decision, however this can be mitigated if you want to live in the apartment when you retire?
Re body corporate costs – yes they add up too.
Personally, I think there are better opportunities, but it will depend on your investment strategy.
Cheers, Ivan
Redwood | REDWOOD | SMSF | PROPERTY | FINANCE
http://redwoodadvisory.com.au
Email Me | Phone MeSMSF - PROPERTY INVESTMENT - WEALTH CREATION AND FINANCE SOLUTIONS
Hi Vincenza,
It is important to do your research, no matter what you choose to invest your money in. In this situation, you should be taking into consideration areas where high growth is expected (capital gains potential), as well as looking for areas with high rental income and taking note of the area’s vacancy rates. The higher the vacancy rate normally indicates a less desirable area and could make the property difficult to sell in the future.
Buying a holiday home or in resort apartments always brings the risk of seasonal demand. You might receive great demand during the peak season, but for the whole financial year these returns may not average out to very much, especially if you have a slow season and low demand.
You should also bear in mind strata costs. If the complex you are looking at has a swimming pool or a gym for example this will push up these running costs. Wear and tear is also another issue, especially if you have lots of people renting out your apartment for short time periods.
Finally, there might be future developments proposed for the resort, and as a private investor, it might be likely that you will have to contribute to the upkeep as well, especially as a resort will want to remain attractive to appeal to its guests.
I’m not saying that investing in a resort is a bad idea, but you should be very wary and weigh up all the pros and cons to suit you.
Mark Mendel (iBuyNew) | iBuyNew
https://www.ibuynew.com.au
Email Me | Phone MeYour partner in off the plan property
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