Managed Units

[Christines]

Can anyone give me information about managed units? I have found a unit near a hospital that has a resident manager. A weekly rent return is guaranteed. Being a bit sceptical I think I need to find out some more info about this type of investment. It sounds too good to be true. I would like to know the pros and cons about getting into this type of property.

 

[Pedro61]

Hi Christine,

I'm not an experienced investor on this forum, there are many others here that are.

By managed units I assume you mean "Serviced Apartments" All I can say about is "BE CAREFUL". It sounds really great to get $500pw for a $200K apartment but what they dont tell you is the vacancy rate.

Many of those places can spend weeks without a tenant, and because the demand can be seasonal (depending on location), you can be the only kid left standing when the music stops.

So yes, they can gurantee that you'll get $500pw. But for how many weeks in the year?

Cheers

Pedro

 

[Christines]

My understanding is that these managed units are very close to a major hospital and are a motel style accommodation. It is a one bedroom unit and they are often rented by country families who need to be close to the hospital either for treatment or to be close to a relative in hospital. The resident manager guarantees a set weekly amount of rent whether the unit is occupied or not.
One of my concerns is what sort of capital growth could you expect with this type of unit and whether you have any control to increase the rent.

 

[bundy1964]

Originally posted by Christines
My understanding is that these managed units are very close to a major hospital and are a motel style accommodation. It is a one bedroom unit and they are often rented by country families who need to be close to the hospital either for treatment or to be close to a relative in hospital. The resident manager guarantees a set weekly amount of rent whether the unit is occupied or not.
One of my concerns is what sort of capital growth could you expect with this type of unit and whether you have any control to increase the rent.

Hi Christines

Have a good read of the lease if there is one.

Same with the management aggrement.

If there is something you don't understand ask an indipendant expert.

Rent increeases would be covered by the lease and/or management aggrement.

Capital gain will depend on the market for investors.

Loans may only be for 60% as it may be viewed as commercial terms.

If the manager goes belly up what happens to the property?

bundy

 

[Jas]

There is a lot of good stuff in the archives on this subject. Do a search on 'serviced apartments'

Jas