QLD [Gold Coast] Apartment

Discussion in 'Where to Buy' started by Archaon, 3rd May, 2017.

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  1. Archaon

    Archaon Well-Known Member

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    Hey all,

    Looking to buy an apartment in Surfers as a holiday rental, and also stay in it on occasion, anyone currently doing this and can give me some advice on tax implications and other complications that may have arisen?

    Also, any other things I should be wary of?

    I'll ask for strata fees and such and look at all expenses though it looks to be cashflow positive I imagine there are alot more outgoings such as cleaning etc, what's a good PM fee and also who would you suggest I go through in Surfers/Goldy?

    About 1100p/mth repayments and 20k pa rent coming in.

    Any advice would be greatly appreciated as I'm on holidays up here and can't do much research as the missus gets ******.

    Regards,
    Arc
     
  2. Archaon

    Archaon Well-Known Member

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    Is 8600 expensive for body corporate fees a year?
     
  3. hammer

    hammer Well-Known Member

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    Yes.

    Its over 40 percent of your rental income.
     
  4. Archaon

    Archaon Well-Known Member

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    What's a more realistic number?

    Looks like 47k gross, less deductible expenses 26k leaves me with 20k pa

    Income. $20000
    Bodycorp $8000
    Rates $3000
    Water. $2000

    Return. $7000

    Sound decent or no?
     
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  5. big max

    big max Well-Known Member

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    Apartments in Surfers should be giving you a net yield of between 5-6%. Right now prices are rising and might do for a few year yet but I think buying and older walkup lownrise close to the beach on the Gold Coast would be a better long term investment.
     
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  6. Archaon

    Archaon Well-Known Member

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    What sort of price range would these be in?

    Any links to your suggestions?

    I really just love the GC, so having a holiday rental that I can use when I wish would be awesome too.

    @Terry_w would there be any tax implications with staying in my own holiday rental?

    Regards,
    Arc
     
  7. thatbum

    thatbum Well-Known Member

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    Wouldn't it be better to just invest somewhere else better and then just pay for a holiday rental when you want to use one?
     
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  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Yes
     
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  9. xactly

    xactly Well-Known Member

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    "Having a holiday rental you can use when you wish"

    OK that is one of the problems. If you want to use it when everyone else does then you are carving out a big chunk of your rental returns by putting a line thru peak season earnings.

    Terry is talking about personal vs investment use. You stay in it 20% of the year. You have lost tax deductions %

    Cash flow turns negative quickly with the extras you haven't mentioned.
    Cleaning... esp with high turn over holiday units.
    Maintenance... massive wear and tear issues.
    Laundry.
    Letting fees, I assume you won't be self managed. It's a lot of work.
     
  10. big max

    big max Well-Known Member

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    If purely for short term holiday rentals then Surfers and Broadbeach and Main Beach are fine. Broadbeach is more refined and sophisticated. Also short term holiday rentals around Burleigh and Palm Beach.

    If more low rise old style which will appreciate more price range would be around 450 - 550 for nice solid and well rennovated 2 brm walk ups. Prime location is mermaid beach and Nobbys beach. If you looked more towards palm beach you might find cheaper prices and/or 3brm for that price. Way way lower body corp fees too.

    Buy as close to beach as possible and/or near light rail (including future route).
     
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  11. Archaon

    Archaon Well-Known Member

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    I'll ask more questions, thanks guys.

    The building has $1000 p/mth guaranteed for one half of the apartment, and the other can be a long term tenant for about $1320 p/mth.
     
  12. big max

    big max Well-Known Member

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  13. 10927

    10927 Member

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    I had two units for sale in Circle on Cavill and Chevron Renaissance for 6 months and couldn't sell. They were stunning units - on the 54th floor of Circle on Cavill and the 26th floor of Chevron. Had great photos done and lots of tyre kickers just wanting to look at the nice views came through. Some offers made but were well below the asking prices. They both didn't sell - why? Because the prices were too high! They were being sold about 15% cheaper than original purchase prices as well as they have decreased in value. In Surfers Paradise - the supply seems to far outweigh the demand for holiday rental units in Surfers Paradise and thus unless you can find a competitively priced unit then they aren't worth buying as you will lose money on them when you go to sell and can't because there is too many in the market. There are also a LOT of overheads and prices you need to factor into the properties to run as a money making business as well that a lot of people don't think about. I know a few owners of holiday rental properties that manage and clean them themselves and this is making them good profits. The companies that manage them seem to take a lot of your profits away with their high costs.
     
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  14. God_of_money

    God_of_money Well-Known Member

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    not this one though... :)
    Screenshot_20170701-194417.png

    Screenshot_20170701-194609.png
     
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  15. 10927

    10927 Member

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    Haha no I wouldn't buy it. Stopped trying to sell it too! I think Ray White have it now :-/

    Funny you mention about the walk up - I just sold one for a decent profit just near crowne plaza hotel. You can find some good renovator deals and a lot of people in the market nowadays to self manage air b n b around Surfers area that want to buy them! They make decent money from them
     
  16. 2020vision

    2020vision Active Member

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    Low rise walk ups in Surfers Paradise are quite a good investment option, the yields are good,the body corporate fees are reasonable and there are always options to add value through renovation.

    Over time IMO walk ups in complex less than 8 in Surfers Paradise will be scarce due to the fact that they aren't being built anymore and the existing ones in good locations are being bought up be developers for high rise developments.
     
  17. Rocky

    Rocky Active Member

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    Just curious, how much do developers pay above market value? Is it a significant amount?
     
  18. 2020vision

    2020vision Active Member

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    It depends really on location of the property, developers are out there trying to make money and won't overspend if they don't have to. But they usually will offer a bit more than market rate to try to entice everyone in a complex to sell to them. I have witnessed a friend sell his one bedroom apartment to the Banyan Tree group for $350k after purchasing it a year earlier for $150k. But this complex was very close to the beach.

    Property values depends on supply and and demand and as time goes by there will be less development blocks available near the beach, this will start a bidding war with numerous developers bidding for the same block which will drive up demand. Land from Surfers Paradise to Mermaid beach is very scarce at the moment, just imagine what the demand will look like in 10 years time when you have developers(local & foreign) bidding against cashed up baby boomers on properties with land content near the beach.
     
  19. fumid

    fumid Well-Known Member

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  20. big max

    big max Well-Known Member

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    Thanks for update. Did you view it?