Serviced Apartment off the plan

[Enda Lifu]

Hi all,

I am considering snapping up one of these off the plan serviced holiday apartments at Headlands in Austinmeer, NSW.

A couple of questions to experienced serviced apartment buyers...

The main one is, can I sell the unit prior to completion? This means I pay the 40% deposit and on completion sell with maybe some capital gains. Looks like there might be some good gains too according to this


Thoughts? Due diligence suggestions?

 

[Shahin_Afarin]

Where do we start?

You are asking for trouble mixing a serviced apartment with off the plan.

Are you aware of all the finance restrictions and potential valuation issues with serviced apartments?

Do you have a copy of the lease? Does it allow for owner occupied residence or just investment?

How many sqm is the unit excluding the balcony?

Is it fully self contained (i.e. has bathroom and kitchen)?

 

[danwatto]

Why do you want to do this?

Not just OTP but why serviced apt?

What's your goal?

Buying off the plan hoping to sell before completion is gambling, and if you can't sell and decide to settle, you might not even be able to get finance if the bank doesn't give you a good valuation. You are at the valuers mercy..

Can you meet your goal/strategy buying established property instead of OTP?

 

[Scott No Mates]

The most recent court case between the developer of 'The Regis' apartments in Chatswood found that the developer owed no duty of care to the owners of the serviced apartments as they were classed as sophisticated investors and weren't covered by the home owners warranties etc or under fair trading whereas the purchasers of the apartments were covered for building defects.

One more reason to avoid.

 

[LeoT]

Enda Lifu,

If you decide to buy this, you are gambling with a lot of money.

This is not an investment.

This is a risky gamble.

If you like high stakes gambles, go for it.

I strongly, strongly, strongly suggest you run as far away as you can from this gamble.

leo

 

[Enda Lifu]

OTP svc'd aptd

Yes, it is a punt. It is uniquely positioned which in my thinking will drive demand.
If the speculation doesn't pay off I can live in it for X amount of months per year rather than be at the mercy of a valuer.
Shahin I realise the restrictions in financing these. Valuation issues? Tell me more.
Yes it's self contained, hence the reason I'd choose to live there as a back stop if I'm not swamped by buyers come 2016.

 

[catsteve]

i smell a rat

 

[Enda Lifu]

does that mean you wouldn't touch it with a 40ft pole catsteve?

 

[Peter_Tersteeg]

Based on statistical probability, I can say that this will be a really, really bad investment. It's unlikely to have the promised cash flow, and will have negative capital growth as well.

 

[Jamie M]

Hey Enda

Service apartments rarely make for good investments - and off the plan just multiplies the risks.

You've got a few clever Sydney based forumites giving you some good advice - sounds like this could be a bit of a dud.

Cheers

Jamie

 

[D.T.]

Make sure you buy it at 95% lvr in a hybrid discretionary trust with your smsf owning half the units. Oh and get it nras approved too.

 

[Corey Batt]

Yes, it is a punt. It is uniquely positioned which in my thinking will drive demand.
If the speculation doesn't pay off I can live in it for X amount of months per year rather than be at the mercy of a valuer.
Shahin I realise the restrictions in financing these. Valuation issues? Tell me more.
Yes it's self contained, hence the reason I'd choose to live there as a back stop if I'm not swamped by buyers come 2016.

Finance issues = reduced market demand
Reduced market demand = subdued capital growth.

There's a reason why secondhand stock can sell for so cheap - I've seen serviced apartments which over 10 years that have only grown by <10% in total - effectively a loss after inflation.

 

[catsteve]

does that mean you wouldn't touch it with a 40ft pole catsteve?

The agents 'took the apartments off the market because of too much demand' ?perleeesse.

Big on flashy presentations. light on details.

I can't see you being allowed to live in these other than for short holiday stays. It appears this was a major concern of council/residents during approvals.

 

[Jamie M]

Make sure you buy it at 95% lvr in a hybrid discretionary trust with your smsf owning half the units. Oh and get it nras approved too.

ahem - throw in some "non genuine savings" too please. Let's not make this a walk in the park.

Cheers

Jamie

 

[danwatto]

The agents 'took the apartments off the market because of too much demand' ?perleeesse.

Shouldn't it be purrrr'lease catsteve?

OP are you being serious or just posting this question to stir the pot and see what happens to have a laugh?

 

[pinkboy]

Make sure you buy it at 95% lvr in a hybrid discretionary trust with your smsf owning half the units. Oh and get it nras approved too.

ahem - throw in some "non genuine savings" too please. Let's not make this a walk in the park.

Cheers

Jamie

.....with more hits than Mohammad Ali on the credit file.....



pinkboy

 

[S.T]

OP are you being serious or just posting this question to stir the pot and see what happens to have a laugh?

or, just promoting a development he might have a vested interest in?

 

[Shahin_Afarin]

This comes to mind.....

https://www.youtube.com/watch?v=WDTRyjMnDOk

 

[Truly Exotic]

Run Forrest Run!!!!

Run faster then Usain bolt!

(in the opposite direction by the way)

 

[Rolf Latham]

Otp and serviced isn't a major issue in and of itself

If a buyer has sufficient funds and they are chasing rtn over growth, we have seen a few of these work quite ok.

Equity growth and access and any form of finance can be problematic

Ta

Rolf