Buying suite in hotel complex

[bram]

Would like to have some adivice on purchasing a strata title suite in Hotel complex in Hobart. Operated by Mecure. Asking price 150K,10y lease back
with 6x5y option.Rental income 10500 a year,annual fee $770 a year includes
all costs (maintainance, rates, repairs, insurance etc`), regards Dave.

 

[geoffw]

I looked into a similar deal some years back. At that stage, the return was a touch over 10%. Even with that higher return, I decided not to look into it. There had been no capital growth at all in the 7 years since it was first sold under s strata title, where there had been some reasonable (but not spectacular) growth in residential housing.

The sales agent indicated that it was of interest primarily to super funds seeking a better return than bank interest, but something safe.

 

[Rolf Latham]

Hiya

They can be quite hard to get finance for

ta

rolf

 

[stevec]

Forget about it. Thats my opinion only though. As Rolf said, its a nightmare to get finance for or even to refinance the ip. I am going through some financial issues atm myself, can be very very frustrating!

Better to get a normal house/unit.

Thanks,

Stevec.

 

[Peter 14.7]

Control.

You have none in these deals.

Essentially a great way for companies to build something, sell it for what they want, and then get a fee for managing it and guess who gets the repairs.

Fees rise and rental fluctuates and the company can go under. Of course they have usually paid the builder his charge before doing so.

A friend bought into one in Darling Habour. Paid $450k and sold for $450k after 10 years. Good Income but no growth.

Peter 147

 

[Simon]

I cannot think of any reason why I would add this to my portfolio - I think they are marketed to novice investors.

I have so many new clients that discover these (they do look good on paper) after running through a few things they don't usually end up buying.

Cheers,

 

[Rixter]

Brisbane around the Kangaroo Point area seems to have alot. I agree no control or CG.

 

[bram]

Thanks guys for the advice.Talking to real estate agent and it seems some people are buying these for there superanuation.We will still to our plan of buying houses/units, regards Dave.