Quest apartments - Yes or NOoo!!!

[Blixsem]

Just wondering if anyone has considered these types of units purely from a low risk, long term capital growth point of view. I know, because of the type of property, they have a smaller resale demographic.

Also do banks generally easily lend for these kinds of investments.

Details:
Initial 15 year lease to Quest with 2 x 5 year options
6.5% Initial rent return with built-in 4% rent increases
Rent fixed for the first 2 years
No management or letting fees
Furniture package included
Rents paid monthly regardless of occupancy
Strata titled bricks & mortar security
Fantastic location only 10km from Brisbane CBD

1 BEDROOM APARTMENTS from $335,000
2 BEDROOM APARTMENTS from $457,000

 

[westminster]

This topic comes up every few months. Answer is 99% no.

Do a keyword search and all the answers are there

 

[TMNT]

ummm, no,

and no,

and no...


and finally, no

oh and in case you missed it "NO!"

 

[D.T.]

Yep go for it
/s

 

[Blixsem]

Ok I am going with D.T advise then.

 

[Brady]

Have only seen 1 yes so far for Quest apartments and I'm still of the opinion that the person who said yes would of done better elsewhere.

It's a NO.

 

[pinkboy]

Ask yourself 'Why the incentives?'

Lenders generally have lower LVR for these as well.

V8Berlina (forum member) I believe has done well out of a couple. You would have to search the forum better as he has done an analysis of his purchases somewhere:

http://somersoft.com/forums/showpost.php?p=425745&postcount=37


pinkboy

P.S. Its 'advice'.

 

[HomePage]

I've recently looked into these, with a view to buying one as a distressed sale to boost the yield up to the 10%+ I think they should have given all the constraints they impose. Couldn't find any, so its back to the simplicity, liquidity and better return of shares for me.

 

[property_girl]

I'll stick my neck out and say yes. I have a serviced apartment which is leased to a large hotel group. I've had more than six per cent return since I purchased it. It is a hassle-free income. There are no agents to deal with, no tenants, no maintenance issues. I pay only a small body corp fee. The lease is due to run out next year. If the hotel group does not take up the option for another four years, I will then find a tenant privately. The units are kept in very good condition. The unit was inexpensive, as many people want to buy to live in a unit. When the current arrangement changes, I know that the price will rise by about another $100,000 (just because I have another unit in the same street, so I know what the going price is).

 

[Aaron_C]

How about no?

 

[Jaggannath]

I have a friend who bought one to live in herself at the end of the lease, and I reckon it's great for her. A good location and good price. I wouldn't buy one under management unless it was close to the end, and somewhere I was happy to live, but each to their own

 

[Truly Exotic]

Thats a big no from me too,

however I have heard of retirees wanting immediate cashflow in sacrifice for CG,
no point in having CG if you arent going to be around

 

[sanj]

I would generally say no too bit we've recently had a few people on SS say that they're budgeting 3% returns on their properties, if someone has expectations that low serviced apartments like this might be worth considering

 

[DaveM]

NO
NO
NO
NO
NO

Had to use 10char for emphasis

 

[property_girl]

NO

Dave, can you please explain why you feel so strongly? I can't speak for Quest, as I know nothing about them, and I should postscript my comment by emphasising that you must do your own research, as not every serviced unit group is the same.

 

[LeoT]

Noooo

Its a NO brainer!

Why would you pay " 2 BEDROOM APARTMENTS from $457,000"

So AT LEAST 457K for a 2 bedroom according to the add 10 km from the cbd when you can buy a 3 bedroom house 10-12km from the cbd for around 550k? Besides all that, there are hundreds of other reasons why the answer is NOOOOO.

Makes absolutely no sense and this is the problem with a lot of 'investors', they just haven't taken the time to learn some of the basics. Its no wonder only a very small percentage of investors ever become financially free from property investing,

 

[Truly Exotic]

Makes absolutely no sense and this is the problem with a lot of 'investors', they just haven't taken the time to learn some of the basics. Its no wonder only a very small percentage of investors ever become financially free from property investing,

thats a bit harsh

high returns often draw people in, and with their slick sales spiel, its pretty easier for novices to get carried away

 

[LeoT]

" thats a bit harsh"

Absolutely. Achieving financial freedom and your dreams is serious business. I don't take it with a pinch of salt.

"high returns often draw people in, and with their slick sales spiel, its pretty easier for novices to get carried away"

If you only read 1 or 2 general investment books from the many available, its almost certain you will come across common themes they all agree on and 1 issue always mentioned is 'slick sales people and the like' to stay away from. I honestly believe waaaay to many 'investors' start buying property before they have the basic fundamentals down. You have to look at the statistics and the reality is most property investors will not become financially free from their investing. Its not the 'properties' fault, so to speak, its the individual. Yes I know its harsh but so is the reality of working all your life and retiring at 70 on poverty line peanuts. Moral of the story, take the time to learn some basics.

Leo

 

[tobe]

Just wondering if anyone has considered these types of units purely from a low risk, long term capital growth point of view. I know, because of the type of property, they have a smaller resale demographic.

Also do banks generally easily lend for these kinds of investments.

What makes it safe? If it were safe, banks would lend a higher percentage of their valuation.

Its not safe. and as for long term capital growth, I doubt that too. ROI isnt that great either, even with a larger gross yield, without the gearing available to a normal property, it takes up a lot of opportunity cost for relatively little benifit.

 

[LeoT]

"If it were safe, banks would lend a higher percentage of their valuation." YES
" Its not safe. and as for long term capital growth, I doubt that too" YES

"ROI isnt that great either, even with a larger gross yield, without the gearing available to a normal property, it takes up a lot of opportunity cost for relatively little benefit" AND YES.

These are the basics I'm talking about.