Property purchase

Congratulations!

Very interesting property. Isn't this an apartment hotel?

But as to your question, how long is a piece of string?
Alex
 
IndexFund said:
Hey guys and girls,

We went and put down a deposit for a 2 bderoom apartment in Frankston.

http://www.realestate.com.au/cgi-bi...eader=&c=33692137&s=vic&snf=rbs&tm=1196589476

Its $169 K. Its situated on Nepean HWY, near shopping center and has access to public transport.

How quickly should this apartment go up? After the east link gets developed, marina gets build, how long do you think?

Cheers
Click to expand...

Interesting purchase...110 unit site in Frankston, main road (highway), swimming pool, sauna, spas, tennis court...

What is it...a new serviced apartment?

Does it have a lease/'rental guarantee' in place?

Is it 'cash flow positive'?

What's the body corporate/fees (if there is one)?

Has yours been fully renovated, or still being renovated?

Has it gone unconditional? :eek:

Personally, at face value, I doubt it would go anywhere very fast...but I don't have enough information yet to be sure.

Smells like the wrong property in the right suburb just looking at the website link...:(

Why did you think it's a good investment??
 
Sure looks like a hotel. I see a restaurant on site, lots of ads under travel accomodation, conferences held there.......
Alex
 
Just saw that link, the 'room type' is listed as 'serviced apartment', but it's got all the facilities of a hotel really.

Personally, not something I'd touch, and seriously doubt that you would get much CG on this...but I could be wrong.

Maybe the numbers work for IndexFund though?
 
My main issues with something like this:
1) lots more wear and tear as you have people coming in and out all the time, and people tend to treat hotels more roughly than they would their own place. More noise, people moving luggage around, etc.

2) body corp costs will be high because of all the facilities, and they're going to be mainly used by the service apartment guests. So in the future when they need to refurbish (and have you seen how quickly hotels get old?) you're going to be paying for it in the form of special levies.

3) Resale will be harder. Would you want to live in a serviced apartment or an ordinary apartment? This isn't Q1. If I'm looking for a place to live I would prefer a quiet block. The facilities that makes it a good hotel may not be useful for an ordinary renter / owner occupier. I mean, as an ordinary renter / OO do I need a restaurant or conference facilities on site?

4) How is the bank going to view this? Will they treat it as normal residential? If they don't, you may find it harder to finance. And if you do, so will any future buyers.
Alex
 
alexlee said:
My main issues with something like this:
1) lots more wear and tear as you have people coming in and out all the time, and people tend to treat hotels more roughly than they would their own place. More noise, people moving luggage around, etc.

2) body corp costs will be high because of all the facilities, and they're going to be mainly used by the service apartment guests. So in the future when they need to refurbish (and have you seen how quickly hotels get old?) you're going to be paying for it in the form of special levies.

3) Resale will be harder. Would you want to live in a serviced apartment or an ordinary apartment? This isn't Q1. If I'm looking for a place to live I would prefer a quiet block. The facilities that makes it a good hotel may not be useful for an ordinary renter / owner occupier. I mean, as an ordinary renter / OO do I need a restaurant or conference facilities on site?

4) How is the bank going to view this? Will they treat it as normal residential? If they don't, you may find it harder to finance. And if you do, so will any future buyers.
Alex
Click to expand...


1) Its not a hotel, they are apartments next to each other. People buy or rent these out, they dont have a weekend accomodation there. The actual hotel is in a different place. So I dont see how this even applies...

2) Body Corp costs are there but once again, we didnt buy a hotel unit so I dont see how this applies.

3) it is non serviced from what we saw.

4) Hmm I doubt there should be any problems, its an apartment.
 
yes i was interested in this thing too .. soo some more info would be appriciated! like levies and bloodycorp. ups bodycorp. ;-)

i guess its first in first served? and how will the rental work? hmmm
 
It used to be a hotel many years ago, but got very run down. Current owners have apparently renovated and are now selling individually.

I was told prices started from $94,000 for a one bedroom appartment.

My main concern would be and this may not concur with everyone else;

1) No land content
2) Body Corporate fees
3) RE unable to disclose annual rates as this has not been estimated yet from council.

I had a factory a couple of years ago. I owned it for several years and during this time, the body corporate managers changed several times and rates seemed to go up each time. We really didn't have alot of control over this. Costs of insurance was huge due to the nature of the building and the occupant we had at the time.

I am no sure how this compares to residential, but I do know it was a real pain for us and I couldn't wait to get rid of it.

I don't think you will have any problems renting these out due to it's location. But it will be interesting to see what kind of tenants start to move in.

I was also told it could not be used as an owner occupier, as to why this is, I don't know.

Very low entry point and this is good, Prices in general will go up, as to how this one will fare. Who knows.

I wish you well, for all we know it could do well for you.

Toni:eek:
 
Toni said:
I was also told it could not be used as an owner occupier, as to why this is, I don't know.
Click to expand...

If this is true that might be a problem. The more alternative uses a property has, the better. If it can only be used as an investment property, then it becomes more like a commercial property.
Alex
 
Apartment

Hi,

My wife and I were actually in Frankston over the weekend to buy property and were told by multiple agents \ people to avoid this specific property being discussed.

We were told that the building was in a terrible state prior to this small reno. Apparently the locals avoid the place like the plague and it is only out of town investors that are buying there.

Sorry to put a dampener on things - I just wanted to pass on the info that we heard.

Cheers,
Waz11
 
So do most people think it aint that great purchase? It appeal about it from what Ive seen but at the end of the day it has very little land, no front or back yards.

What was wrong with the actual structure of the building?
 
I would take into great consideration about the advice given to you by the others in the forum before you proceed!

If it is a issue, as others have suggested, I would see if you can take out a building inspection on the quality of the whole building, including your unit, as well as considering all the BC fees & sinking fund fees. If they are ex-serviced apartments i would also consider the layout of the apartments & any other stigma attached to the building!


Good luck !
 
I'm very interested in toni's comment that it cannot be owner-occupied. Do you really want a residential IP that cannot be used by owner occupiers? That seriously limits your resale market.
Alex
 
alexlee said:
I'm very interested in toni's comment that it cannot be owner-occupied. Do you really want a residential IP that cannot be used by owner occupiers? That seriously limits your resale market.
Alex
Click to expand...

Yes this is a major point, one that doesn't make sense to me (to me this sounds like a serviced apartment). Buying this type of property will, as mentioned, severely reduce the marketability if you need to sell it.
 
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