Alex Perry Developments

[georgie1]

Hi guys

I wanted to get your opinion on the Alex Perry development at Fortitude Valley Brisbane. I wanted to see if anyone could see any holes in their 6% rental guarantee for 5 years. They are willing to pay you 6% yield for 5 years no matter the vacancy. Obviously they are going to let these out short term but what about when the 5 year period ends. Will everyone rush exits when the 5 years is up?

Just wanted your thoughts, thanks.

 

[JWR]

In short - yes.

If something needs to be guaranteed there's a good reason for it.

Real rent is probably a lot lower as people will find in 5 years.

They build the rental guarantee into the price you pay for the unit - resulting in you paying too much for the unit and being stuck with a lemon when the rental guarantee is up.

Not to mention 6% yield + depreciation will probably still cost you money each month after all expenses (incl strata - which may be very high)

So proceed with caution.

 

[Brady]

+1 if its a good property why do they need to sweeten it with a rental guarantee???

caution

 

[georgie1]

The rental guarantee will include their management of the property for 5 years. So eg if its a $500k property you will receive $30,000 every year for 5 years no matter if it stays vacant for 5 years. The only thing I need to check if it increases with inflation. Besides the inflation point is it worth it? I mean no headaches for 5 years seems ok.

 

[mattnz]

I wouldn't trust any development with a brand name of a fashion icon!

 

[Jtkumnick]

rental guarantee. seen sooo many of these types of development.
As mentioned above- you are paying the costs of your own guarantee in the sales price........
not only will there be a mass exodus, I think you'll find the market rent and market price a lot less after 5 years than the figures implied.

 

[Jenko]

I don't know about the development however surely after five years the value and rent would of gone up?

 

[moyjos]

http://www.propertyobserver.com.au/...units-seem-to-go-out-of-fashion/2012071855640

Found this article regarding the development. The biggest flag I see is that the management will go to a "hotel group". Sure you may get your 6%. But I guarantee you will get a "refurbishment" bill every year to keep the unit up to grade.

Run.. Run fast..run far.

 

[JWR]

Jenko,

Even if it does go up in 5 years (which it probably won't since you are overpaying from the start) is it the best investment over the next 5 years in Brisbane, QLD or the rest of Australia? Probably not...

 

[Brady]

Exactly what JWR saying.

Why are you wanting to invest in this property?

Because its new? and has rental guarantee for 5 years?

 

[CBPD]

More info ..

Hi All, new to this forum but certainly not the Brisbane apartment market (as principle at www.cbpd.com.au) or Alex Perry Residential as we have brought this development to the market. To clarify I can confirm that the 6% rental return for 5 years is net of management fees and let fees ( 2 years on the 2 bedroom apartments) if you choose to give your apartment to the onsite managers who in turn will place your apartment into the under supplied inner city corporate market. The managers will supply the full designer furniture package at no cost to yourself.

If you have tried to overnight stay in the innercity of Brisbane I am sure you will understand the need. Or you can rent your AP apartment out to the long term rental market or be an owner occupier. Your choice. FYI the prices were set prior to the sale of the management rights where the offer of 6%pa was generated and not 'loaded' with the rental offer. It certainly is also not a 'marketing' ploy initiated by the developer but agree it is a selling point.

www.alexperryresidential.com

Agree that AP is certainly not a vanilla style development and was never planned to be in light of certain project offerings (NRAS anyone?) and wanted to set the record straight on AP.

Thanks for reading.
Dave Beard
www.cbpd.com.au

 

[Temporisation]

The rental guarantee will include their management of the property for 5 years. So eg if its a $500k property you will receive $30,000 every year for 5 years no matter if it stays vacant for 5 years. The only thing I need to check if it increases with inflation. Besides the inflation point is it worth it? I mean no headaches for 5 years seems ok.

Hi georgie1

Did you end up buying in this development or did you purchase somewhere else