Smallest Commercial Property Ever

Good article in the latest API about ATMs, with input from Rob Williams.

Taking this thread slightly off-topic, what do people think about the API article on ATMs and owning ATMs in general.

I've done some numbers and they seem to make sense even when only considering the minimum guaranteed return. I took into account that 100% borrowed at 7% and 10% prinicipal paid back per annum in line with depreciation.

However, I don't see much scope of getting more than that. Currently, less than 15% of ATMs get the minimum transaction level to reach the guaranteed figure. This raises the question on why would they offer a minimum guarantee when they are going to have to fill it out from their own pocket. Also, I am not confident that the companies have strong enough financials to stay in business for the 10years of the contract.

Other opinions?
 
Taking this thread slightly off-topic, what do people think about the API article on ATMs and owning ATMs in general.

I've done some numbers and they seem to make sense even when only considering the minimum guaranteed return. I took into account that 100% borrowed at 7% and 10% prinicipal paid back per annum in line with depreciation.

However, I don't see much scope of getting more than that. Currently, less than 15% of ATMs get the minimum transaction level to reach the guaranteed figure. This raises the question on why would they offer a minimum guarantee when they are going to have to fill it out from their own pocket. Also, I am not confident that the companies have strong enough financials to stay in business for the 10years of the contract.

Other opinions?

I saw ads in a magazine a while offering sited ATMs for sale, fully serviced offering guaranteed returns of 20 or 25% (can't remember) and finance arranged with a partner lender. I thought if the returns are that good that they can offer a guarantee and finance, why do they not just take the finance themselves and keep the ATMS rather than spending money on ads in glossy magazines. The guarantee is only as good as the company offering it, and in the end concluded that if it sounds too good to be true, it probably is.

I think the better alternative may be an investment in Customers (ASX: CUS). It's come off the boil recently, but I think long term it would be a safer exposure to non-major-banks ATMs. The success of an ATM, like that of vending machines (another idea I have been thinking about) depending on siting as the crucial factor. You may find that most of the most lucrative sites are already taken by the major players.

Note that I haven't read the API article so can't comment specifically.
 
Small & Creative Commercial Strata Lots

Great post, FormerLuker!!!

Was involved in some mass strata storage unit developments a few years a go.

The developer was looking at creating mass volume, small size high security strata units for wine, cigars & valuables. Was even considering a smoking & tasting room that would be common property within the strata scheme.

Interesting concept owning a strata lot that is 0.25sqm in size; the size of a carton of beer or less.

At least with the wine, cigars & valuables there was some safety involved.

Where as a freestanding ATM machine could certainly require consistent & ongoing refurbishment after many hit-&-run’s & ongoing vandalism.

Who knows what could happen to your ATM machine after the recent unpopular interest rate hike!!!

Philip
 
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