Quest apartments - Yes or NOoo!!!

[Peter_Tersteeg]

A few observations from clients who have bought into serviced apartments:
* The cash flow wasn't as good as yet expected.
* They're lucky to break even when they sell within a 10 year time frame.

In all these cases, when the client went to purchase the property they felt the cash flow was excellent and they were buying under market value.

My only client that's happy with their serviced apartment actually purchased an apartment which he leases (on his own terms) to a management company. Another client has held one long term, it's not doing anything special but not doing badly either. Every other deal like this has eventually been less than anticipated.

 

[MTR]

This is not something I would every purchase.

However, we have friends who purchased in this block, they have always had outstanding results from their property investments.

I am pretty sure they fully furnished and manage it themselves. From memory think they purchased on completion of build and the balconies were massive, very attractive and great feature when selling. The returns were very good, but they are active with this investment.

Here it is


http://www.questapartments.com.au/A...Perth_CBD_Fringe/Quest_On_Rheola/Welcome.aspx

 

[property_girl]

I purchased mine for $235,000 a few years ago. I have consistently had a return of $16,000+ every year with about $1000 in expenses. They now sell for $335,000. I am happy with my purchase.

 

[redwing]

A good article here with commentary by Quest Serviced Apartments founder and chairman, Paul Constantinou

Service that may bring a smile

?If you?re going to buy this asset just for capital growth, you are probably better off just buying a residential asset and hoping the market goes up,? he says.

?This is more income-driven, where people want certainty of income.?

Paul Constantinou

 

[property_girl]

Outrigger in Surfers apartments: income is just under $10,000 and it ALL goes in body corp fees, rates and other charges. When I asked the real estate agent why anybody would buy one of these, he said that it was for capital growth.

 

[LeoT]

"When I asked the real estate agent why anybody would buy one of these, he said that it was for capital growth."

 

[Shahin_Afarin]

Pros:

1. Cashflow

Cons:

1. Massive finance restrictions and if the lease agreement doesn't allow for the option of owner occupied residence then the number of lenders is further limited. St George, Widebay and Citibank from the top of my head and some will only limit their risk to 25% of the building and some will just not do it regardless of standard policy.

2. CG - due to the difficulty in ascertaining finance you will be somewhat limited when it comes to CG and this in turn could affect your ability for equity releases.

3. Lower LVR's meaning you will need more than the usual deposit

It is going to be very rare to find the pros outweighing the cons.

 

[Aaron_C]

It's always been a dud investment, is a dud investment, and will most likely always be a dud investment. If all I wanted to do was put money into something and get 7% of my money back each year with guaranteed no capital gain, I would be better off putting it in a term deposit.

 

[Peter_Tersteeg]

Pros:

1. Cashflow

Cons:

1. Massive finance restrictions and if the lease agreement doesn't allow for the option of owner occupied residence then the number of lenders is further limited. St George, Widebay and Citibank from the top of my head and some will only limit their risk to 25% of the building and some will just not do it regardless of standard policy.

2. CG - due to the difficulty in ascertaining finance you will be somewhat limited when it comes to CG and this in turn could affect your ability for equity releases.

3. Lower LVR's meaning you will need more than the usual deposit

It is going to be very rare to find the pros outweighing the cons.

Despite the agent giving you all sorts of evidence to the contrary, I suspect the "Pro" of cash flow won't be as good as advertised.

In my experience there are rarely any pros in serviced apartments at all.