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QLD Studio Apartment - Hotel rooms in Surfers Paradise

Discussion in 'Where to Buy' started by gach2, 21st Jul, 2015.

  1. gach2

    gach2 Well-Known Member

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    Anyone have any experience with these?

    Will only target places that allow occupants to be of owners choice (no guaranteed rental income bs)

    Prices are cheap but got a feeling expenses (cost of holding) is quiet high.

    Have been looked at rental income (seems to be decent - 15% gross - no idea on net)

    Main reason im even bothering is that i need a place to stay there so it would be a PPOR initially and may even be converted to a holiday apartment.

    Good option or better of renting?

    I do realise finance wont be easy but the cost is quiet petty (have ability to buy without finance - prefer to finance 30-50%)
     
  2. Leo2413

    Leo2413 Well-Known Member Premium Member

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    I would only buy it if i wasn't interested to grow my portfolio and not interested in capital growth and I was in the mood to waste my money.
     
  3. HUGH72

    HUGH72 Well-Known Member

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    Check out the management agreement and associated fees carefully.
    I personally wouldn't consider it but it could work for your situation
     
  4. gach2

    gach2 Well-Known Member

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    So in your recommendation it would be best to rent?
     
  5. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Depends on your goals, plans, situation of which I really don't know.

    But what I do know is that a studio apartment hotel room in SP is not going to be a great investment. Not by a long shot. I would rather rent and use my deposit elsewhere that's going to yield me a much higher capital growth return in the medium to long term than this studio apartment hotel room.
     
  6. Azazel

    Azazel Well-Known Member

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    Not knowing the details, I can't imagine it would make more financial sense than buying a unit in Southport?
    Places in Surfers have been spruiked to would be investors since time immemorial with plenty of people getting stung.
     
  7. gach2

    gach2 Well-Known Member

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    leo - this sits nowhere in my goals or plans (just an opportunity -good or bad - as dont really like the idea of renting - but may be better in this scenario)
    I might look into how much the holding costs are and reconsider the whole idea (did have a look at a dual key apartment which is a bit pricier where the bc and rates added to about $12k per year and im not sure whether it can be owner occupied and the management fees were close to 20k a year if the hotel was going to manage it.)

    Azazel - i wouldnt consider southport as i want a place in surfers paradise (renting or buying is a different question - but location is set)

    Thanks
     
  8. Leo2413

    Leo2413 Well-Known Member Premium Member

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    But it will affect your plans/goals because its not a good investment dwelling.
     
  9. gach2

    gach2 Well-Known Member

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    Thanks for that

    having a serviced apartment in surfers paradise would be part of the dream :p (real dream being able to throw that kind of money on things i dont really need)
     
  10. gach2

    gach2 Well-Known Member

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    Did email a few agents today and I will post up figures of a few properties i enquired on just so anyone else can refer to them in future
     
  11. gach2

    gach2 Well-Known Member

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    Outriggers studio apartment
    BC - $95 per week ($4950 per year)
    Rates - $3500 per year ($67 per week)

    Holding cost = close to $8500 a year ($180 per week)

    Looking at similar permanent rental properties the value would be $280-$300pw (around 15k a year)
    Landlord insurance $300
    Management fees (10% - $1500 - though would expect it to be 2-2.5k as permanent leases would still have 2-3 turnovers per year)

    I would allow $11000 in expenses if rented

    not allowing improvements and maintenence net return is only $4,000

    Other option would be rent them out holiday wise (maybe $150-$200 per night) - lot of vacancy - each stay would have cleaning bill - have no figures to post up about this property

    Cost of these apartments range between $70,000 (mortgagee repossession) to $125,000 (sold price is only upto $120k)
     
  12. Azazel

    Azazel Well-Known Member

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    Good stuff.
    Are you looking old or high rise? 1 bedroom or studio?
    Just saw your reply. 1 bed would be better for resale? But $75-$120k is pretty low risk if you can find one with lower BC I spose.
     
    Last edited: 22nd Jul, 2015
  13. gach2

    gach2 Well-Known Member

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    studio/1 bed/ dual key 2 bed (after looking at it)

    but at this moment leading towards renting than buying

    The reason i guess the apartments are cheaper is due to the bc plus there around 35m2
     
  14. gach2

    gach2 Well-Known Member

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    Mantra legends (seen being sold as cheap as $150k - 220k)
    Dual 2 bed key (1 studio and 1 bedroom apartment - 63m2)
    BC -8K
    Council - 2600
    Water - 1700
    Holding cost - 12,300 (approx $240pw)

    Return
    Managed holiday rental - $40k return with around 20k management fees - $20k
    Net return $7,700

    Permanent rental
    $5-600 per week - $27k? with allowance of $3500
    Net return - $11,200

    Not bad if rented permanently or if you can find lower management fees
    Not that great either as the value of these have dropped significantly (around mid 300s in 2004)
     
  15. Azazel

    Azazel Well-Known Member

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    Ah, could be an issue getting finance for such a small place.
     
  16. Elives

    Elives Well-Known Member

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    whats the lowest m2 generally banks will go? excluding sydney..