Childcare Centres

[Zedlum]

Very hard to strip down a purpose-built childcare and turn into a residential, with many large communal bathrooms, usually a lot of glass partitioning, unusual room configurations etc.

Yeah... no, in that case I would be looking to knock down & redevelop a multi townhouse type of thing. Remembering it is only a fall back position should it really become redundant for whatever reason. I have seen a few motels around the place being redeveloped, I guess due to multiple failed leases.

Quite a few seem to be modified houses anyway, they could not be that hard to convert. Mind you there are probably more $$$ in redevelopment if you get that right... small single level stuff is going like hot cakes around here, the boomers seem to be going that way.

 

[ije]

Interesting thread. I know it's 2 years since the orginal post, but still relevant! I wonder if finance is still an issue just to build with the sole intention of being landlord? 10 year loans, high lvr?

Any one have indicative build costs per place?

 

[chindonly]

Interesting thread. I know it's 2 years since the orginal post, but still relevant! I wonder if finance is still an issue just to build with the sole intention of being landlord? 10 year loans, high lvr?

Any one have indicative build costs per place?

I don't know build costs, but there are several specialist Childcare business sale websites around.

They include leasehold and freehold sales, so you could quickly work out what it might be worth to build and own.

 

[ije]

Thanks chindonly, I was reviewing sites like these:

http://www.childcarespecialistsaustralia.com.au
http://i.childcaresales.com.au

Reading the sale prices, returns and leases, it all looks rosy- the devil is in the detail, risk analysis, etc. but it's something I'm willing to research to understand if it's right for my wife and I.

Also,this is not a bad read in terms of generally what to look for when buying land for this purpose. Each lgov is different obviously, but you can see the common requirements here from a few councils.

http://www.ssroc.nsw.gov.au/pdf/(Final)ChildcareDisPap.pdf

 

[caferacer]

Most banks will do 70% on the freehold & going concern and 50% on the leasehold.
The main focus is on the owner/ centre's history.
A couple of years I/O might be available for good applicants but generally the debt needs to be amortised in a short term 10-15 years.

 

[jrc]

and the risk of government regulation impacting on your costs

http://www.abc.net.au/news/2014-11-17/childcare-ratios-concern-for-sa-changes/5897918