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  1. #1
    Join Date
    Jan 2005
    Posts
    1,443

    Default Your thoughts on this type of property/deal?

    Anyone care to offer their views on a property like this?

    http://www.bluepeak.co.nz/property.aspx?pid=1536

    I've requested more info, but I can't seem to work out how you get a fixed term agreement, across the whole property, when letting individual rooms?....unless there's some type of sub-let agreement?

    Maybe I should've submitted this thread in the RM list?

    Glen.

  2. #2
    Join Date
    Dec 2004
    Posts
    1,042

    Default First Thoughts

    As far as the "immediate equity" is concerned there isn't any.
    The fee takes around half of any "equity" and legals etc will take the rest.
    The leasing arrangement by way of "fixed term" suggests that there is one tenant who sub-lets the rooms.
    This dodgy practice turns properties designed for families into de facto boarding houses.
    It also allows rents to be ramped up on a room-by-room basis creating a questionable high yield/value.
    Then 112M2 ( approx 1200 sq ft) divided into 6 bedrooms would leave standing room of 18M2 per person (approx 190 sq ft).
    But no allowance for lounge, dining room, kichen, toilets, hallway etc.so I would guess that each person has a bedroom of approx 100 sq ft . About the size of the average wardrobe.
    Maybe the residents sleep standing up.
    Then is it legal and insurable as a sort of boarding house?
    OllyN [email protected]
    Independent Property Consultant
    Residential and Commercial Solutions

  3. #3
    Join Date
    Apr 2006
    Posts
    4,018

    Default

    Please don't get me started on RM property deals!

    It looks like a dog deal Glen, and I'm not just saying this because I think the Blue Peak/RM deals are generally crap.

    I have a multi-let like this, with each tenant on an individual FT tenancy. It does yield well, but it is not "low maintenance".

    The BP deal is rubbish for the reasons Olly mentions.

    Don't be mesmerised by the yield. The property mayreturn some cashflow, but I wouldn't bet on it.

    Also, how can they advertise 94.13% capital growth on that property over the last 10 years, when it is 4 years old?

    2 offstreet parks for 6 tenants is useless.

    Paul.

  4. #4

    Default

    Glen

    Firstly, I am a big believer that the way forward for 99% of property investors is to do the research and d/d and find the deals themselves.

    However, if that isn't an option (perhaps you work 168 hours a week) and you have to rely on others to bring deals to you then my advice fwiw would be to use a reputable and independantly recommended BA (who is paid by you and working for you), rather than some deal on a plate with a hefty fee and lots of question marks.

    M
    Last edited by Mark_B; 22-11-2007 at 11:53 AM. Reason: typo
    Comments may not be relevant to individual circumstances. Before making any investment, financial or taxation decision you should consult a professional adviser.


 

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