Sydney Taxi's

[nigel m]

Question from left field.
Has anyone looked at "investing" in a Sydney Taxi Plate?
Cost: $300,000
Requirement: Owner Accreditation $100 once off payment
Return: $ 400 per week (7% Yield)
Capital Gain: nil +
If your Cashed up, then not a bad return on investment.
Comments for and against please

 

[alpina]

wonder what would happen if the deregulated the industry? how much would the plates be worth then?

julie

 

[nigel m]

Alpina
NSW government can't deregulate anymore than they have, if they do then they will not have a Taxi Industry in this state!
Regards Nigel m

 

[XBenX]

rentals do tend to be a bit up and down though

you can make some K growth out of them (last 5yrs for example)

 

[Ajax]

Nigel,

does owner accreditation require the owner of the plate to be a registered taxi driver? I did the theoretical component of the taxi drivers course years ago...I hear its a lot harder these days.

The other question is if you lease your taxi plates to another driver to what extent could you be liable for the acts of the lessee?

 

[nigel m]

Ajax

Taxi Owner accreditation requires the payment of $100 (once only), No taxi driving license is required.

A legal lease is set up between owner and lessee (could be a taxi company)

The Lessee is responsible for everything

The plate owner is responsible for nothing.

There is no maintenance, repairs, non-payment by tenant etc

If the lessee is a taxi company, they will sub-let the plate.

Regards
Nigel

 

[D.T.]

lol

400 / W = 20,800 per year.
300,000 / 20,800 = 14.4 years to pay for itself.

Not including taxes or the cost of the loan, if one is used. Do the numbers speak for themselves?

 

[Lotana]

Don't forget capital growth. What is it like for the plates? Last time I look at this asset class was 10 years ago when they were around $200K mark.

Cheers,
Lotana

 

[brains]

I think 7% return on $300k is not real flash.

You could start (not buy)your own business with $300k and get amazing returns as income and also capital in developing a valuable asset worth hundreds of thousands if not millions of dollars in the years ahead.

It requires hard work tho, so maybe your talking passive investment only.

Or even start your business with $100k and passively invest the balance and still get get amazing returns with a business and security with investment. Even tho i think business is secure as anything out there and cant be matched for ROI but most people dont include it in their options when thinking investments.

Just like anything else you follow the correct procedures and rules to reduce risk and your away.

 

[nigel m]

Guys
Thanks for the comments, this is the kind of feedback I was hoping for.

Brains
I believe 7% return is not too bad.
There is no work required, the lessee does all the work, you as Owner of the plate just sit back and collect the 7%. No manual work.

Lotana
Your'e correct plates have risen from $200,000 10 yrs ago, i have a friend who sold in 1974 for $25,000
Will they keep rising I don't know, but very doubtfull.

Regards
Nigel

 

[bbruham]

Last year Sydney taxi plates crashed to $212,000 for a un-restricked plate. They've risen to approx. $280,000.
The return of 7% with no overheads is pretty good.
Your only problem is keeping the plate leased.
There are plenty of day drivers out there, that's Monday to Friday,
but come nights and weekends they're like hens teeth - Rare!!
If you're the dope whose has purchased a lease, then you drive the crap hours and have a day driver doing all the good shifts.
The takings are not that flash either, day or night.
The whole industry is complaining about everything.
There is no way in hell that the gov't will de-regulate taxis, the industry is too strong for any gov't. The fellow in charge of Sydney's taxi co-op is bigger than any gov't minister or gov't.
THIS I KNOW, AS A FACT.
I own a taxi plate and car. I work mine with one day driver, Mon. to Fri. Two night drivers one Mon. night to Fri. night. The other
drives Sat. night and Sun. night.
I drive Sat. and Sun. days.
I won't mention wear and costs.
As a straight out buy, and then lease the plate out is a good investment. But don't try to run your own cab until you've worked one for a length of time.

bbruham.

 

[brains]

7% return on $300k is $21k pa gross. Deduct expenses from that and then tax and you havnt really made a lot on such a large investment. Not to mention your interest payments if you borrow the money. Not much cream left there.

 

[Sim]

How much would a bank lend on a taxi plate ? I would be surprised if it was much more than 50%. That's a lot of cash and/or equity you have to put in yourself. I would expect much higher returns for that amount of outlay.

 

[nigel m]

BBRUHAM
I'm only looking at owning a plate.
This is then leased for a period of 12 mnths minimum, preferably to a Taxi coop who then have the headache of finding drivers to drive the long shifts.

An owner can only lease to an accredited operator (cost over S1000).

By leasing the plate out, there are NIL Expenses, NIL shifts to drive, NIL angry customers to contend with.

Now 7% return sound better.

Bye the way I've known Reg (Mr Sydney Taxis) for 30 years
Your dead right.

SIM
Good question can we get Rolf to comment please.

Regards
Nigel

 

[bbruham]

My bank loaned me 100% plus loan costs, but I had to cover the car and co-op fees, licencing, insurance etc, etc. P&I loan.
Don't know Reg personally, but know what he and his team can do!!!!!!!!! (Reg is a one man team).
If you have your plate leased out, no worries what so ever. It's a good way to make a smart living.
Now you're on your way to your first million$$$$. As Rich Man, Poor Man author said you are on your way when you have some one else working for YOU.
I always intended to have three taxis working for me, but I fell into property investing. I will return to taxis in the next two years.
Then I'll sit back and manage my little fleet of three or four max.
Doing the servicing, changing tyres etc.
My taxi knowledge goes back fifteen years.Yet I only own one, due to me being a WOG.(worker of gov't). I run it part time.

bbruham.

G'day AJAX, nice to see you back on the postings again. Haven't seen you post since that beauty with INVESTOR and LAWSJS
on the topic "Anyone buying in Sydney".
That was so good I have printed it and supplied to my interested mates. A CLASSIC posting.

 

[Glenn]

Hi Bruce,

How does the income vary from the day to nightshift??

Glenn

 

[bbruham]

G'day Glenn,

It depends on who you drive for. The main co-ops charge $110.00
to $118.00 per day shift, and $180.00 for a Friday night.
This depends on which taxi co-op you drive for. Manly co-op is the most expensive!This is me, my car is in Manly colours. For me to keep my drivers I charge $160.00 for Friday and Saturday nights. $130.00 Thursday. $115.00 Monday, Tuesday, Wednesday and Sunday nights per shift. GST included.
If you lease a plate it costs $400.00 per week, then you pay for everything. The owner of the plate has no overheads at all.
Except taxation of course.
Other owners charge
Monday day$115.00 nights $115.00
Tues. 115.00 115.00
Wednes. 115.00 145.00
Thurs. 115.00 155.00
Fri. 115.00 180.00
Sat. 115.00 175.00
Sun. 115.00 115.00
Gross total $1,805.00 per week. The above includes GST!!!
Some greedy bastard owners limit the amount of kilometres you can driver per shift. Go over and they charge you 50 cents a "K"
for every kilometre there on. So you don't just driver around or go cruising. Although with the price of LPG you don't cruise, 59.9
cents a litre.

BBruham

 

[Glenn]

Thanks for the reply Bruce,

I guess that based on the lease payments, only friday, sat and sun are the days that income will vary, and then by 30-50%.

Glenn

 

[Pedro61]

Taxi issues

Four things about buying a plate that would make me think twice.

1. You cant "ADD VALUE" by adding an extra room, putting in more storage, or a carport etc.

2. You (probably) cant access equity as easily as an IP. Not sure about this one, would have to approach a lender.

3. Leases are 12 months with "vacancy" rates a little unconfirmed. Would have to check with a co-op to confirm their demand for licences, and

4. What would happen to values, leases, demand, etc if Syd city council (or whoever regulates) decided to release another x hundred plates onto the market.

Otherwise a 7% return with no insurance, tenants, breakdowns, advertising, etc sounds reasonable.

 

[nigel m]

Pedro61

Good questions

Questions 1 & 2 Your correct


Q3. Leases can be 12 mnths or 2 yrs.
There is currently a waiting list in Sydney of Accredited Operators who are looking for leases.

Q4. The industry is contolled by the NSW Government, but it's actuall RUN by the NSW Taxi Council (ref earlier reply to Bbbruham)
If the Council let the Government (They won't) release more plates then the price of existing plates and leases would drop (only new leases)

I believe that plates are currently $20,000 overpriced!!

regards
Nigel m