Nice area. I stayed at that beach very recently. There is a coffee house right on the beach that closes down every afternoon at 4:30 Pm. You can take your bottle of local vino and some cheese and watch the sunset over the ocean - it's a great thing to do.
Check the income - it's probably losing money as most units in holiday areas are at the moment, due to the high $AUD. If the $AUD falls then it will start to make money again, especially if the $160K becomes $140K or better.
You need to perform a due diligence to check that.
From a lending perspective this is a serviced apartment, and they are hard to finance. the CBA will only lend 50% of the valuation, and the val might come in short in an area dependant upon tourism. Even if you take it out of the letting pool the banks may still regard it as a serviced apartment.
What does that mean? It means that it will be hard to finance, the market is thus a lot more restricted, and it will be harder to sell when that time comes.
On the plus side, as there are limited buyers who can complete on this type of property, you have little competition, and you may be able to drive the price much lower than that. Seriously if you live in Perth, it's an easy drive for a weekend getaway that can earn some holiday rental if it's not in a long term leasing pool.
I bought something similar at a fraction of that price (but not in WA) so anything is possible, and it's potentially a good buy if you do your homework and can afford it. If you can stump up 50% in cash, make a cheeky offer and have some beautiful weekends at the vineyards and limestone caves in the area - beaches are fabulous too.
Continue to leave in the rental pool and use when you can. This way you receive a monthly income and if you come down to stay, pay owners rates only which vary depending on Peak or Off Peak Season nightly rates.
This states that if you want them to rent it out but still use it yourself occasionally, you will have to rent it off the management. Probably just the tip of the iceberg as far as the management's control over the complex is concerned. Perhaps you are not even allowed to rent it privately outside their controls? This is the next step up from timeshare purchase I would say. Good luck with your purchase.
Looks like a fantastic view and location, but no images of the actual apartment is VERY telling and I suspect it is either a dogbox or rundown. Any other pics?
It's also in Margaret Beach Resort. My other questions would be what is their average vacancy rate? In the off peak season in particular you may go weeks without having any tenants/holidaymakers. A resort with a pool and grounds and such would likely have very high body corporate rates due to maintenance. What are these costs?
I suspect you are promoting this place because you either hold property there or you are selling property there. I'm not having a go at you Foxbat, but let's not beat around the bush. Which is it? In your entire time here I have never seen you talk about property on these forums outside of Margaret River/Gnarabup, which combined with the 'folksiness' of signing off at the end of each post, indicates the you are likely a Real Estate agent of the old school.
Nice area. I stayed at that beach very recently. There is a coffee house right on the beach that closes down every afternoon at 4:30 Pm. You can take your bottle of local vino and some cheese and watch the sunset over the ocean - it's a great thing to do.
Check the income - it's probably losing money as most units in holiday areas are at the moment, due to the high $AUD. If the $AUD falls then it will start to make money again, especially if the $160K becomes $140K or better.
You need to perform a due diligence to check that.
From a lending perspective this is a serviced apartment, and they are hard to finance. the CBA will only lend 50% of the valuation, and the val might come in short in an area dependant upon tourism. Even if you take it out of the letting pool the banks may still regard it as a serviced apartment.
What does that mean? It means that it will be hard to finance, the market is thus a lot more restricted, and it will be harder to sell when that time comes.
On the plus side, as there are limited buyers who can complete on this type of property, you have little competition, and you may be able to drive the price much lower than that. Seriously if you live in Perth, it's an easy drive for a weekend getaway that can earn some holiday rental if it's not in a long term leasing pool.
I bought something similar at a fraction of that price (but not in WA) so anything is possible, and it's potentially a good buy if you do your homework and can afford it. If you can stump up 50% in cash, make a cheeky offer and have some beautiful weekends at the vineyards and limestone caves in the area - beaches are fabulous too.
True i just walked for 1 hour down to the river mouth and back. Thanks for your thoughts. Peter
Dr Kinetoscope
15 Sep 2013, 12:13 PM
Looks like a fantastic view and location, but no images of the actual apartment is VERY telling and I suspect it is either a dogbox or rundown. Any other pics?
It's also in Margaret Beach Resort. My other questions would be what is their average vacancy rate? In the off peak season in particular you may go weeks without having any tenants/holidaymakers. A resort with a pool and grounds and such would likely have very high body corporate rates due to maintenance. What are these costs?
I suspect you are promoting this place because you either hold property there or you are selling property there. I'm not having a go at you Foxbat, but let's not beat around the bush. Which is it? In your entire time here I have never seen you talk about property on these forums outside of Margaret River/Gnarabup, which combined with the 'folksiness' of signing off at the end of each post, indicates the you are likely a Real Estate agent of the old school.
True, i do own a property in the area, but it is not a holiday unit, it is a small resort. Bought hopefully at the bottom of the brutal Western Australian tourist down turn. It is this property, it is freehold. Yes it was run down and man we have been working for 5 months to get it up to speed. surfpoint.com.au I am requesting knowledge in the area of holiday units, it is complicated and if someone has been through this before they may offer some information. As someone has. (Peter Fraser) I have mention before that i have just bought the resort but get in trouble from the Moderator. So this is a bit of a Clayton's property forum as one can not be open about what they are interested in or doing. Anyway back to the main body of the thread, (hopefully the preamble is out of the way) is there anyone with personal experience in managed holiday units?? Thank you for your interest. Peter from surf point.com.au and yes i got a free house thrown into the deal. :pop:
doubleview
15 Sep 2013, 10:19 AM
Personally I wouldn't buy this, if you buy this expect fuck all capital growth!
The low price is a trap!
Furthermore Find the history of the body corp fees(The last 5 years worth if it has that much they look newish, the more the better)!!
see how much BC has gone up over that period, then get ready to fall off your chair!!
yes $5,500 per year body corporate and $1,800 rates, plus costs to repair roof. $300,000. Peter
yes $5,500 per year body corporate and $1,800 rates, plus costs to repair roof. $300,000. Peter
Peter I have plenty of experience with these!!
Ok Thats $7300 your biggest out lays
Other considerations include
mortgage. managers commission. replenish apartments, soap & shamps + cleaning etc. Foxtel. laundry (A shit load more than you think.) electricity. repairs, air cons, storms, etc ( these are not always covered by sinking fun)
Honestly Peter these things are head aches, not to mention one of the most illiquid investments you can get!!
What is the nightly rate and vacancy rate like the last 2-3 years has it gone up or stayed flat.
you can bet your bottom dollar all your outgoings have gone up well above inflation!!
To even cosider this I would say you need to get it at an absolute bargain price.
perhaps positively geared @ %50 vacancy!!! even @ so there are shit loads better places to invest
mortgage. managers commission. replenish apartments, soap & shamps + cleaning etc. Foxtel. laundry (A shit load more than you think.) electricity. repairs, air cons, storms, etc ( these are not always covered by sinking fun)
Honestly Peter these things are head aches, not to mention one of the most illiquid investments you can get!!
What is the nightly rate and vacancy rate like the last 2-3 years has it gone up or stayed flat.
you can bet your bottom dollar all your outgoings have gone up well above inflation!!
To even cosider this I would say you need to get it at an absolute bargain price.
perhaps positively geared @ %50 vacancy!!! even @ so there are shit loads better places to invest
Hmmmm, That is what people close to me are saying. Thanks again. Peter
Other considerations include [..........etc.........]
I agree. I've run the ruler over a couple of these and came to the conclusion that you need to look at it, not as a real estate investment, but as buying a minority share in a business - i.e. you have no say in how the business is run.
None of the models you use for evaluating real estate quite work. For example, the income is very volatile and tied to the business cycle, not the real estate cycle. Income grows (probably) at a slower rate than for a renter because if tariffs shoot up there will be a fast supply response as normal residences convert to holiday units. Your costs are much more labour intensive and will grow like wages and not inflation etc etc. Not to mention it will be run for the benefit of the management company, not for your benefit.
I came to the conclusion that at the right price these could be a viable investment, but you almost never get the right price because there are others out there who are willing to pay as if it were real estate.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
I agree. I've run the ruler over a couple of these and came to the conclusion that you need to look at it, not as a real estate investment, but as buying a minority share in a business - i.e. you have no say in how the business is run.
None of the models you use for evaluating real estate quite work. For example, the income is very volatile and tied to the business cycle, not the real estate cycle. Income grows (probably) at a slower rate than for a renter because if tariffs shoot up there will be a fast supply response as normal residences convert to holiday units. Your costs are much more labour intensive and will grow like wages and not inflation etc etc. Not to mention it will be run for the benefit of the management company, not for your benefit.
I came to the conclusion that at the right price these could be a viable investment, but you almost never get the right price because there are others out there who are willing to pay as if it were real estate.
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