iceman,
Return is very low (6.77% BEFORE tax) & doesn't take into account some other factors like the cost of owning the property over time, the real occupancy rate, etc. It doesn't take into account capital growth either - you need to explore this as well.
They charge a high letting fee - probably have an exclusivity clause as well over this & the linen and catering charges (lock you in, empty your wallet) - check the contracts.
Watch that Manager's salary as well....full-time managers are expensive.
What are the strata fees & will they zoom up in the future (often developers keep them low at first to get people to buy in)?
Is the property only good for retirement housing - if so what happens after the baby boomers die off (longer-term)?
What's the transportation & facilities like nearby? Without good public transport, entertainment (in diversity) & health care you'll find retirees staying away in droves (but you still have to pay the wages for that full-time Manager).
Consider the control & flexibility you have with this investment (not much). Then look at the return you would get from a 2 bedder unit nearby (probably better)
Why not do some research on the last facility they put up (Sunnybank Hills) - what's the occupancy & cost of owning a unit there?
in my view - would not touch with a barge pole...may be right for a different type of investor who sees this investment as low riskdue to the market targeted (trust me, it isn't really that low risk compared to the alternatives).
Cheers,
Aceyducey
