Country Property

From: Fredo J

Would like a thought out opinion on the purchase of an old pub in a counrty town
current unemployment rate 8% The pub has bee strata titled into 3 tenancies and returns 10.6%- I know there is not a lot of capital growth but the return is good and it helps the rest of the portfolio--balance ????
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Reply: 1
From: Sim' Hampel

I'll throw it back at you Frank...

Is it really a good return ? 10.6% ? Is this enough to cover the risks ? What happens if you can't keep the rooms rented ? Will maintenance on the "old" pub kill your returns ?

Not saying do or don't do it... just posing some food for thought... would be interested to hear your opinions !

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Reply: 1.1
From: Jeremy Laws

Do the pub yourself mate! HUGE profit in them! Throw the tenants out!
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Reply: 1.1.1
From: Gail H

I reckon you could find an equivalent return with less maintenance/hassle/risk (and possibly with some depreciation benefits as well). The lenders may not want to lend too much on the deal, and you could end up tying up more of your equity than would be wise.

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From: Mark Laszczuk

Take it to your accountant. Crunch the numbers, if they work, do some more research. If the research comes up trumps, and your happy, buy the pub, if not, walk away.

'no hat, some cattle'
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