Canberra Serviced Apartment

[asdf]

Anyone owns these? SimonJulie? Was down in Canberra over the wend on an emergency trip. Wanted to rent a self serviced apartment last minute for the week. Admittedly I had no access to the net but even over the phone, only motels were left. Went through the yellow pages and was left with a 2 bed apartment at $290 a night or studio apartment for $99 a night (small 30m2 studio about 20 years old I reckon). These aren't even in centre of town. Everything was booked out!

Granted there was a triathlon going on (apparently) and Parliament is in session this week but someone told me some clients own serviced apartments that run at 80% occupancy rates. Canberrans all seem to think Canberra is a happening place, money talks and hence am tending to agree!

 

[WillG]

A friend of mine used to own one but got rid of it several years ago. The yield is OK but cap gains are ordinary.

I believe it is the managing companies that make all the $$'s. Not the investors !

 

[geoffw]

Hi asdf

I've seen some people make some good money out of serviced apartments.

The most effective way was to find an empty apartment for rent, and to enter into a five year contract with the owner, furnish it with all the mod cons, and let it out as a serviced apartment.

The owner has a long term lease.

The occupier has a high standard furnished apartment- often something booked for some months in advace. (Not often years).

And the middle person picks up an income similar to the owner of the unit, with a MUCH smaller outlay.

But the middle person gets income, no growth.

I had investigated serviced apartments as a single deal (buy apartment, let established management run them) a few years ago. It was definitely CF++, (up to 10% return) with return guaranteed over a number of years. But there had been no capital growth (they were selling for the same price aas 10 years before), so we considered it a no go.

 

[Dare 2 Dream]

Yep, well said Geoff.

I don't like them, and avoid selling them to investors.
It's purely for cashflow that you would enter into these, capital is virtually non existent in most serviced apartments here.

 

[Alia]

Hi guys,

Where's hot right now in Canberra?

I only want to spend about 200-230k, and want to get a high rental yield.

Am I right in thinking inner city is the place to get higher rental returns?