PORTSEA - under $700K , and best of both worlds!

[Peter Hood]

Well documented holiday rental
returns approximately $28000 gross per annum of casual rentals in main holiday periods and weekends.

Self managed lettings through various websites and return bookings.

House is then available for family and friends at other times during the year.

Valued at $695k and will look at offers.

see images: www.qfour.com.au

 

[Peter Parker]

Let me think, why would a hard-headed investor buy it?

1. Yield: $28k/$695 = 4% (can get that from a normal house in Melb with less management hassles and longer term tenants)

But I'm curious as to how the 'self managed lettings work' - surely there'd still have to be inspections, etc between each tenancy? And if you provide knives and forks, do the guests pilfer them as souvenirs?

2. Capital growth: A real possibility and probably the reason you'd be looking at a place like that.

Let's say it gains $500k in 10 years and you want to sell. If it was your PPOR you'd pocket the $500k gain (less stamp duty, etc) but have no tax deductions. If it was an IP, you'd be up for CGT - $80-120k maybe but have heaps of tax deductions and some rental income.

I wouldn't put much value on your own access to the place, unless you're able to set your own working days and can time your holidays between your tenancies. And what are the tax implications of using an IP for your own holiday purposes?

3. What is the scope for increasing the rental income, maybe by more active management or serving a different clientele base?

Peter

 

[Peter Hood]

tghe thinking Spiderman

1. quite right. can achieve 4% in melb with less management hassles.
all done via internet, price you pay for having a house by the beach for effectively 9 months of the year!

house is fully furnished and can be added into deal.
in 3 years, there has been very little theft or damage. we charge a substantial security deposit to cover any damage and for the house to be left in a clean condition, thus minimising the maintenance aspect.
surprising how much of an effect this has as incentive to look after the place!

2. capital growth: yes, the coastal areas have some well documented upside.
CGT.. an issue for any investment property if you intend
selling down the track... some good accounting can minimise that.

3. there is plenty of potential to market and increase lettings - i have simply relied on the internet at this stage, as i like the utilisation aspect. 4% is fine for me, plus some nice tax deductions.