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  1. #11
    Join Date
    Sep 2012
    Posts
    227

    Default

    Thanks everyone.
    Appreciate it.

  2. #12
    Join Date
    Mar 2015
    Location
    Brisbane Wellington Auckland
    Posts
    807

    Default

    Quote Originally Posted by Nick G View Post
    My friend owned one going into the GFC and it tanked in value for several years.

    I can't get my head around them. Maybe they're a better proposition than they were 10 years ago but I can't see how. Always open to be convinced otherwise but it seems to me that you're funding the hotel's biggest cost and taking the risk for not enough return.
    When you looked into it 10 years ago Nick
    1: what were the returns then (in and out of the pool)
    2: while in the pool was it subject to GST
    3: I often see hotels refurbishing their rooms . Who pays?https://i.stuff.co.nz/business/10647...-refurbishment
    https://www.nzherald.co.nz/business/...ectid=11931722
    https://i.stuff.co.nz/business/88716...12m-renovation [/url]
    hotels seems to need a major refurbishing every 25 years
    The cost of this is pretty major and has to be accounted for in your depreciation hence reducing the net yield.
    So when doing the numbers you have to look at the whole leasing cycle
    Last edited by Beano; 12-01-2019 at 08:37 PM.

  3. #13

    Default

    I would need to check because he sold it later. However my understanding is that for most of these you buy a regular residential property, lease it to the hotel and the hotel runs the hotel operation. Your lease should not be subject to GST and neither should the asset. This is how accountants are advising folks to run their AirBNB operations to avoid the asset having a GST liability attached to it past $60K income per year.

    I think the yields were low at the time. Again I will ask it was a long time ago.

    I am pretty sure the owner pays but it would be a good idea for the hotel to help as it would then incentivize the owner to stay in the pool
    Free online Property Investment Course from iFindProperty, a residential investment property agency.

  4. #14
    Join Date
    Jul 2005
    Location
    NZ
    Posts
    977

    Default

    In my case the chain stipulates that redecoration is required to their standard every ten years. Owner pays. I don't mind that because the apartment is being meticulously maintained, throughout the ten year period, at the chain's expense. If I object, I can easily remove it from the pool. But why would I do that, the chain is paying market rent and the presentation of the property is always immaculate.


    Some of the apartments in the complex do have GST liabilities, depends on how they were originally purchased, mine don't and I would avoid those that do. Some of the apartments are also locked in to a lease of about 30 years, I would also avoid those.

  5. #15

    Default

    Not a criticism Aston as we all have to make decisions and choose what works for us but 3.8% seems a bit on the low side ?

    Quote Originally Posted by Aston View Post
    3.8% But I don't invest on numbers, I'm mortgage free and I just want a trouble free investment. In the time I've owned them, I have personally inspected on one occasion only and replaced one small light fitting. Most guests are professionals, travelling on business.


    Personally I would invest in CBD area only in a complex without a pool. Tourist destinations attract younger people/families etc. meaning more wear and tear, more noise, translating to higher BC fees. Out of Auckland only.

    Checking the online guest reviews, is an easy way to get a good feel of the place.

  6. #16
    Join Date
    Jul 2005
    Location
    NZ
    Posts
    977

    Default

    Quote Originally Posted by ermat View Post
    Not a criticism Aston as we all have to make decisions and choose what works for us but 3.8% seems a bit on the low side ?
    I understand your comment ermat. But 3.8% net suits me because I am still invested in real estate but without all the hassles generally associated with it.

    I know investors with broken down old houses, who are struggling to get them insulated and fitted with heat pumps etc. Many of these people are achieving not much more than 4% net.


    At the end of the day who's better off?

  7. #17

    Default

    Point taken. so is the 3.8 an average of your properties. do you own less than 5 ?

  8. #18

    Default

    well comparing two low cashflow situations isn't really a snapshot of the wider market. My average is 8% nett. However if you're happy with your risk/return profile who are we to judge.

    I'm going to check these out now after this thread. We have access to list some and I'd always stayed at arms length. More research required.

    Quote Originally Posted by Aston View Post
    I understand your comment ermat. But 3.8% net suits me because I am still invested in real estate but without all the hassles generally associated with it.

    I know investors with broken down old houses, who are struggling to get them insulated and fitted with heat pumps etc. Many of these people are achieving not much more than 4% net.


    At the end of the day who's better off?
    Free online Property Investment Course from iFindProperty, a residential investment property agency.

  9. #19
    Join Date
    Sep 2008
    Posts
    7,574

    Default

    better returns than most hotel leases

    https://www.trademe.co.nz/property/r...7d1641fc087c39
    Last edited by eri; 14-01-2019 at 06:59 PM.
    have you defeated them?
    your demons

  10. #20
    Join Date
    Sep 2007
    Location
    Auckland
    Posts
    8,319

    Default

    Quote Originally Posted by eri View Post
    better returns than most hotel leases

    https://www.trademe.co.nz/property/r...7d1641fc087c39
    Yeah but $400 pw gross. So they can just up the expenses and you still get f**k all.

    Interesting that you can negotiate you own lease deals though Aston. Not sure how you do that? Isn't there a lease in place when you come to buy it?
    Squadly dinky do!


 

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