Serviced apartment: Guaranteed return and can be owner occupied post-lease?

I'm interested in a serviced apartment near Melbourne cbd run by 4 seasons hotel. The agent told me the rental return is guaranteed and a part of the lease and also that once the lease expires it can be owner occupied (as other apartments in the building are). Is there any way I can verify all this? My conveyancer is based in the suburbs so I don't think they'd know but I could try run it past them.

 

I'd expect the section 32 to include a copy of the lease agreement.

Some things to be aware of:
* Lenders don't like serviced apartments. You should be able to borrow 60% without too much trouble, but more can be challenging.
* Most of these make lousy investments. Little capital growth and the rental yields tend not to be as good as advertised (guarantee or not).

 

Have you had a breakdown of yearly costs?

the BC can be crippling.

 

it seems to be the only opportunity to own a decent sized unit in the cbd with parking. Most other options are an extra 30%. Obviously I won’t be able to live in it for a while but the yield helps pay it down in the meantime.

 

When other properties in the area are 30% more, perhaps you should see this as a red flag.

 

A guarantee is only as good as the person/entity who is providing the guarantee! Have a look at some of the Quest serviced apartments at the beginning of COVID - the manager of some of the apartments (the franchisees who actually operate the hotel) wrote to some of the owners and said we won't be paying your rent during COVID (see Quest tells retiree landlords: We can't pay you any rent). I wouldn't be trusting an agent who says the rental is guaranteed. DYOR

 

Could you lock quest out for non payment ?

 

Hope you've looked into lending options too. On top of needing a larger deposit, you'll find that many lenders won't even offer loans for apartments in some inner city postcodes.


The property 'blacklist': Australia's most risky suburbs for home lending revealed

 

this is the one on st kilda rd, opposite the shrine?
could have long term value because of excellent location
how many bedrooms and what size?
usually the obstacle, apart from low OO appeal, is that the body corp is sky high

 

Quest Potts Point and Quest Adelaide Central to close on 11 November and 12 November respectively.

Gotta feel for those who placed their funds down in expectation of a steady income. The Franchisees are probably trashed financially as well.

Statement from Quest Apartment Hotels regarding Quest Potts Point and Quest Adelaide Central