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Tricky
You pay the GST when its out of the pool. Short term leasing may work but the IRD do look at how its actually being used.
Westpac would lend 65% on it.
I like the Heritage but frankly I wouldnt buy it. Theres plenty of other stuff out there which would yield 10% and appeal to a wider market for resale.
If you took it out of the pool & wanted to avoid the GST implications you should have it managed by a management company that deals with short term rentals as well. There are not many that do but they have structures in place to deal with the GST legitimately - but they would have to continue renting it on a short term basis.Having no carpark may cause some problems out of the pool though as it would limit it's rentability - although out of towners may fly in & not need a carpark, there are alot of those that will. At least in the pool the hotel will provide a carpark from their pool.The return is low in the pool but at least the hotel pays all the bills ie body corp, power etc.
Tricky
I like the Heritage but frankly I wouldnt buy it. Theres plenty of other stuff out there which would yield 10% and appeal to a wider market for resale.
Agree. My opinion concerning apartment investment (and to be honest all PI) is that you always need an 'out'.
If it all turns pear-shaped, perhaps a superior block is built next door, you find a serious lack of tenants etc etc, you need to be able to resell at a good price and quickly. Hotel lease arrangements can be finicky and therefore can dissuade a lot of potential purchasers. Also if Westpac is willing to lend 65% to you, that says to me that the potential pool of purchasers (if you need to sell) for you will be very limited (no first home buyers - unless they have a good deposit, no 'stung' PIs who now have -Net worth etc etc).
I guess you only have to look at the prices realised for many apartments and see how they have hurt Bluechip investors and the like.
A big "thank you" to everyone who contributed to this and my request for help. Not progressing it any further at this time, so perhaps someone who takes care of these sort of things can cancel/withdraw this particular thread to free up some space!! Kind regards to all, BTDT
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