Buying a cheap studio in unilodge, broadway, sydney, too good to be true?!

[Peter 14.7]

Why are you writing this today when yesterday you posted about it and everyone said "RUN". I thought you'd "seen the light"???

These are NOT good investments just like serviced apartments and carparks in the same area. On paper them seem good but they are dogs.

I don't know exactly why but I hear the managing agent takes every fee possible, you wear a lot of vacancies and repairs to furniture etc...you can never use it and have NO control.

They should be great being in Chippendale. I bought in Chippendale where in 2007 and have seen my property increase by 33% based on last sale and rents the same.

Move on and don't be tempted by the hype.

Peter 14.7

 

[JohnHenry]

yes that's an eye opener answer and suggestion mate.

thanks for the help and your sharing here, I really appreciate that/

You guys save my live.

 

[Shahin_Afarin]

Completely agree with AaronC's comments. They are bad bad investments. I had one client wanting to offload a serviced apartment and they just couldn't sell it. Investors often focus on just capital growth and rental return and not also on the ability to sell the property if need be.

Shahin Afarin
Property Finance Consultant

 

[bthk123]

Don't have any experience with these, but why doesn't the market work itself into the equation and make these a half decent investment?

I.e. why is there a surplus on the market at prices that don't move? Would these be more attractive at 10-11% yields at current rent vs 7%?

My guess is the psychological hit of vendors not wanting to offload at their nominal purchase price (although in real terms they would have taken a hit due to inflation).

Anyone of the naysayers hear think there is a opportunity to snap a bargain in an area overlooked and dismissed by most investors?

I guess you still have to compete with the inexperienced and gullible that just look at current yields and believe they are outperforming proper 1 bedders.

 

[Terryw]

Don't have any experience with these, but why doesn't the market work itself into the equation and make these a half decent investment?

I.e. why is there a surplus on the market at prices that don't move? Would these be more attractive at 10-11% yields at current rent vs 7%?

My guess is the psychological hit of vendors not wanting to offload at their nominal purchase price (although in real terms they would have taken a hit due to inflation).

Anyone of the naysayers hear think there is a opportunity to snap a bargain in an area overlooked and dismissed by most investors?

I guess you still have to compete with the inexperienced and gullible that just look at current yields and believe they are outperforming proper 1 bedders.

When people cannot get finance it becomes very hard to buy. This in turn leads to the sale price stagnating.

 

[RightValue]

I had one client wanting to offload a serviced apartment and they just couldn't sell it.

I am interested at a 15% net yield if your client is still interested in selling.

 

[Property Meister]

obviously there are a lot of threads about people commenting about why these sorts of investments are not good,

maybe if there are people out there (and willing to reveal) who actually have one of these investments, and could post their returns and current values!

This may help others in making a decision

 

[Mick C]

I have past clients who have bought this property in question; ranging from couples to clients buying it under their SMSF.

Return is great no question about that, vacancy period is on and off - high turn over of new tenants ( every 12 month if your lucky) - poor CG.

Regards
Michael

 

[Shahin_Afarin]

I am interested at a 15% net yield if your client is still interested in selling.

Hi Mate,

The rental return is $310 per week and the owner is looking at $175k. Not exactly 15%.....

Shahin Afarin
Elite Property Finance

 

[Terryw]

Hi Mate,

The rental return is $310 per week and the owner is looking at $175k. Not exactly 15%.....

Shahin Afarin
Elite Property Finance

More like 9.2% Gross yield.

Take out costs and these would unlikely be cashflow positive. Little Captial growth potential too.