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Have your property questions answered by our team of property and finance professionals. Simply fill out the form above and we’ll answer your questions and post them on the site. It’s a great way to share others’ experiences in the property market, and to tap into the knowledge of some of Australia’s best property minds.
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Answers
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| Whats an acceptable return on investment? |
| What sort of return would you consider acceptable to make a serviced apartment an attractive purchase? , writes Graham. |
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Paul Bitdorf's answer: There is no easy answer to this question.
What type of service apartment is it? Is it zoned for short stay only or is it a residential apartment rented as a short term serviced apartment.
As an investor you need to ask...read more |
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| Whats an acceptable return on investment? |
| What sort of return would you consider acceptable to make a serviced apartment an attractive purchase? , writes Graham. |
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Paul Bitdorf's answer: There is no easy answer to this question.
What type of service apartment is it? Is it zoned for short stay only or is it a residential apartment rented as a short term serviced apartment.
As an investor you need to ask yourself a question, what is your prime objective, is it return, potential capital growth or a combination of both?
Historically tourism or short stay zoned properties experience very little, if any, capital growth over long periods of time.
So why would you buy one? It would have to be produce an excellent return to compensate for lack of capital growth.
Here is an example for you using some conservative assumptions:
Service Apartment – Term 10 Years
Purchase price $350,000
Return per annum 8%
Capital growth per annum 0%
Total Return
Income $28,000 x 10
Total $280,000
Residential Apartment – Term 10 years
Purchase price $350,000
Return per annum 4%
Capital growth per annum 4%
Total Return
Income $174,808
Capital gains $168,000
Total $342,808
And then there is operational risk factor in the case of service apartment the owner is usually tied up to one operator and relies on his performance.
Ownership of a residential apartment gives the owner freedom to choose a managing agent, and when it’s time to sell provides a much wider marker of potential buyers than service apartment.
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| Investing in port coogee? |
hi,
I am considering investing in port coogee with land at $500K. any tips if it is a good investment?, writes sunil. |
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Ronnie Elhaj's answer: You generally don't receive full tax benefits such as depreciation and negative gearing buying land alone. If that is not your strategy for investment, there is nothing fundamentally wrong with Port Coogee.
I personally however prefer...read more |
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| Investing in port coogee? |
hi,
I am considering investing in port coogee with land at $500K. any tips if it is a good investment?, writes sunil. |
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Ronnie Elhaj's answer: You generally don't receive full tax benefits such as depreciation and negative gearing buying land alone. If that is not your strategy for investment, there is nothing fundamentally wrong with Port Coogee.
I personally however prefer to have some income from my investments and advocate investment at the lower end of the market for better return on investment and liquidity if you need to sell for any reason.
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Meet the Experts
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Chalpat Sonti
Senior Journalist WAToday.com.au
Chalpat Sonti is a senior journalist with WAtoday.com.au, Fairfax Digital's Perth-based news service. He specialises in writing about residential property, consumer affairs, business and politics.
Chalpat has worked as a journalist in three states of Australia, as well as both islands of New Zealand. He does not own a house at present, though has done in years past. Maybe one day they will be affordable again...
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Gavan Forster
Director of Economics and Housing, Master Builders Association of WA
Gavan has almost 30 years building experience as an industry and Government advisor at a State and Federal level. Gavan is a public commentator on topical industry issues and is an Industry representative on numerous government advisory committees. He's happily married with 3 children and is a diehard much maligned Collingwood supporter.
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Jay Lawrence
Senior Property Manager, Nicheliving Real Estate
Jay Lawrence acted on her passion for property, and commenced her Property Management career in 2004. A Registered Property Manager and a member of REIWA, Jay specialises in the professional management of residential properties. In her current role as Senior Property Manager at Australian Property Alliance, Jay has successfully tripled the size of the property management business in a little over three and half years and is continually expanding her knowledge of the industry by regularly attending Property seminars and working towards the completion of a Bachelor of Commerce degree. Jay also has experience in the professional management of Holiday and Commercial properties and during her spare time enjoys renovating houses.
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