17 Room xResthome, Upper Hutt

[Son of G]

This one caught my eye in the local paper.
However after doing the numbers on the back of envelope, I do not think I could make it stack up. I have not seen inside, but it was built in 1950.

Here are my numbers
Purchase
500K, upgrade 200K

Expense:
P&I @ 8%: 62k
Cleaner 10h/[email protected]$15/h: 8k (Shared showers, WCs, and common areas)
Repairs: 20K (I expect this would attract tenants rougher that those at Soho.)
Insurance: 5K (not sure but it is high risk and 17 rooms)
Rates: 3K
Total: 98K

Estimated rent:
100K ($130pw per room with 45 weeks rent per year)

That does leave much to pay for my time actively managing a Rent-By-Room.

Address:
41 McParland, Upper Hutt

Advertisement:
http://www.realestate.co.nz/1316623?...l_properties=0

Rates:
http://202.68.87.21/cgi-bin/rating/r...&K1&1596003400

Aerial View:
http://xplorer.upperhuttcity.com/XPLview/Default.aspx

This only interest I have in this is that I live & own property in Upper Hutt.

[Ahar]

Is this property suitable to be used as professional rooms.....say into "wellness" type businesses?

I've got a friend who has just resited her bus into an ex resthome that is now home to a variety of small businesses.....massage therpaist, beauty therapist, hair stylist etc.

Might even suit a doctor and physiotherapist

The returns would be higher I should think

[Son of G]

I have not see inside it.

It is 300m from Upper Hutt's Pack & Save, which is on the edge of the CBD.

Here is the Google Maps Link. Google Maps has 41 & 41A labelled incorrectly.

As an aside. I think Google Maps and Upper Hutt city information use the same aerial photo. The cars are parked in the same places on both.

[Son of G]

Am I silly providing deatails of a property?

Got this interesting PM

Howdy.....apologies for being so silly to post that idea where anyone could "steal" it.

You've found the deal so I think you should be the first to look into it....I'm in AK so not interested.

So are you going to go further and look into it? Might just be worth your while. Do you know what single rooms would rent/lease for to a business?

Being an ex commercial property, I shouldn't think there would be too many problems converting its use....but then I know squat diddly about councils and their petty regs.

Let me know.....I'm curious, might learn something myself.....thinking I might do the same one day

[Son of G]

Reply to PM

Here is my response and his agreement for me to post it here:

Howdy.....apologies for being so silly to post that idea where anyone could "steal" it.

I do not mind someone stealing my idea. As I said, the numbers do not look promising after a second take. The reason I first looked at it, is that 17 rooms would gross over $2000 per week in Upper Hutt.

So are you going to go further and look into it? Might just be worth your while. Do you know what single rooms would rent/lease for to a business?


Being an ex commercial property, I shouldn't think there would be too many problems converting its use....but then I know squat diddly about councils and their petty regs.

Not sure of the commercial value as I do not own any commercial property..

Let me know.....I'm curious, might learn something myself.....thinking I might do the same one day

Do you mind if I post this publicly? I'm in to learning new stuff too and your reply is very interesting.

Yeah a public post is fine with me.

[Jumpin]

If you are not personally chasing the deal, it a really good thing to do. People could discuss the deal, the merits, the figures that may work, change of use etc. This forum was originally built up on a collegial type discussion to assist people with ideas, education etc.

[Son of G]

The discussion about the thread

People could discuss the deal, the merits, the figures that may work, change of use etc.

I was hoping for that type of comment and discussion.

Do you think I would have got more comments if I had posted it to a different section of Property Talk?

I thought that Caveat Emptor NZ was appropriate given it is currently on the market.

I have to admit I did feel a touch sorry for the vendor. The agent is one of the smaller firms in Upper Hutt and is not part of a franchise.

I did send the agent a link to this thread, but he has not replied by email or joined the discussion.

[revdev]

Do you think I would have got more comments if I had posted it to a different section of Property Talk?

I thought that Caveat Emptor NZ was appropriate given it is currently on the market.

If you aren't selling the property, then there is no need for it to be in the CE section. It will certainly get more views out on the main forum....I'll move it now for you.

[Son of G]

Thanks for moving the thread. I am interested in what others think.

[Niall]

Finance would be a bit tricky with this I think.

Where did you think the $200k would be best spent on? Its not a very big section and there are already lots of flats around it.

Interesting part of town

All the best,

Niall

[Son of G]

The place was built in the 1950's. I would expect it to be very tired.
Also I would also investigate to see if it is possible to change the ratio of WCs to rooms.

The $200K was a very rough stab in the dark. Also $500K would be a low ball offer. So they sort of balance out.

[Son of G]

Well......

I had a look through during this afternoons open home.
It is very tired inside.

Agents flier said 15 rooms....
But told by the agent that it only has resource consent for 12 occupants.

Did meet someone else there who was not looking through for the first time.
They will have the vision and drive to turn it into a working building again.

[Ahar]

Did you look into changing its use to proffessional rooms? You said it was on the edge of the CBD so could be a good position as long as it has parking.

[Son of G]

There is only on street parking.

[Son of G]

The latest 3 yearly RV's for Upper Hutt set at 1 August 2010 have now been released. Almost all properties have recorded a drop in RV from 2007. This one went from $630k to $600k.

After going to the open home the agent sent me a flier for a small commercial building in Upper Hutt. It is a 2 floor building. Upstairs residential apartments, downstairs His & Hers hair dressing shops. Gross income $48k.
The listing price was $630k, 2007 RV $560k, 2010 RV $450 - that folks is a 19.6% drop in rateable value. The hairdressing tenants will be happy, could be less rates to pay next year.....