| |
| |
|
Real Estate Information |
|
|
Strata Title Hotel Investments
Want to know why Strata Title Hotel Investments can be a "Hell Hole" for the unwary? Hello, Colm here ... A RESIDENTIAL INVESTMENT MANTRA FOR YOU! WHEN ALL ELSE FAILS, What do I mean by that? Flexibility should be your investment by-word. One of those important 'bench marks' that you should achieve. Strata Title Hotels are built because: * Major Institutions don't want to own Big Hotels. * Not to allow you to enjoy being part of the growth in the hospitality industry. So What Are The Facts: Why are Hotels built and sold by Strata Title? Why do Developer Build Strata Title Hotels? Developers will say, "strata title allows the average investor have a part of the inner city tourism/business market." What's the real reason for Building Strata Title Hotels? Major Institutional investors in Australia do not want to own hotels any more. They got into them in the 70's, 80's and generally, did not enjoy the experience. Why? The ROI was not 'there.' Institutions are essentially passive investors and like Flexibility in their investments. Financial institutions do not run Hotels. So they must engage Managers, like Sheraton, Hilton etc to manage the hotel for them. Institutions want to engage the Manager on a Lease Aggreement; however Managers prefer a Management Agreement Arrangement. Management Agreements are the NORM for the industry, and the Managers are expert at maximizing their performance bonus and the amount left over (the investment return) for the institution has generally not been good enough for institutions to continue to want to expand their hotel investment portfolios, even in CBD locations. So if that is the attitude of the 'Big Boys' and a developer believes there is a market now for a new hotel, their only other option is to go the strata title route and go for the 'Little Guys.' Can I put it another way, with no insult intended. The investment performance of hotels is not good enough for the Professional Institutional Investors who have 'money power' and 'high skill' behind them; so let's go for the non-professional investors through strata title. Remember the Big Boys employ the Big Managers. The Big Managers don't get involved in Strata Title Hotels. That's left to the lower ranked managers & the lower ranked developers. I don't think that is good enough, do you? 1. If the complex is run as a HOTEL, you can't live in permanently, 'cause it's too small. 2. If its internal space IS UNDER 50sqm a buyer will not get bank finance. 3. And finally if it has a RENT GUARANTEE you've now got three good reasons to do a '180 degree' turn and RUN.(See separate report) If investors decides they still want to buy a strata title hotel unit, the most important document to read is the Management Agreement and if there are any Guarantees; who is underwriting the Guarantee; HOW STRONG ARE THEY? Strata title hotels have a poor history unfortunately, because of the reputation and lack of experience of the developers who put the deals together AND PROMOTE THEM. Only a few months ago I helped a family who had been in one of these strata title hotel investment for five (5) years. They sold for less than they paid. Enough said. Let's get away from hotels: Let's suppose your financial world has fallen apart, and you have to cut things down to the bone. If your investment unit/house has been designed for the investment market, it is generally smaller than what society regards as a normal size. You and I know what a NORMAL house and unit looks like and feels like; don't we? When you see Rent Guaranteed Investment Real Estate, have you noticed that they just don't look like we expect normal houses and units to look. Usually they are much smaller and are built in a complex. So the first rule is never buy any property that is under 50 square metres internal area. Do not include balconies in this calculation. IF THE AREA IS UNDER 50 SQM INTERNAL AREA, BANKS WON'T ACCEPT THE UNIT AS SECURITY. Oh, you say, 'but my friend was able to buy one and the bank lent them the money.' Yes, you are correct BUT it is usually a finance deal done by the developer with the bank and the bank will usually have security over other assets. When you come to sell, a bank won't lend BUYERS money for a property under 50 sqm internal area, and that leaves you looking for a 'CASH BUYER ONLY.' Your Flexibility is wounded, but you can't see the blood yet. The unit/house is physically not considered standard, as compared to what is normally on the market. They can vary from small houses/townhouses in outlying areas or inner city units in complexes being run as a hotel/motel. The Real Estate Development Coach Author of "Residential Development Made Easy" Copyright Colm Dillon, October 2003 Colm Dillon author of "Residential Development Made Easy" the only 'How To' Become a Developer eBook, selling in 38 Countries, has developed $1.2 Billion worth of real estate - read more on his web site http://realestatedevelopmentcoach.com/realestatedevelopment.html
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
Estate Planning Estate planning can enable you to control your property while you are alive, take care of you and your loved ones if you become disabled, and give what you have to whom you want, the way you want, and when you want, and if you wish, you can save every last tax dollar, professional fee, and court cost possible.Estate planners frequently begin the estate planning process by analyzing clients' personal and financial dreams, aspirations, fears and objectives. Investment Concerns for Selling Your Home Besides the emotional upheaval of uprooting from your home, your property is most likely the biggest investment you have ever made, and its sale causes financial stress as well. You must protect your investment nest egg and secure your future. Grab Your Dream UK Home On The Cheap - Property Auctions Did you know that every year thousands of UK properties are sold at significantly below market value? The majority of these properties are released through property auctions where regular savings of between 10% to 40% are available to market value. Even so, property auctions continue to be used only by the elite and for the astute buyer/investor this generates a fantastic opportunity to secure a dream home/good investment at bargain basement prices. Investing in Real Estate Vehicle for Wealth Building Real estate is one of the best vehicles of building wealth. Historically real estate has outperformed other asset classes like stocks or bonds, and is reasonably predictable and less volatile. Coming to Las Vegas - the Las Vegas Real Estate Boom Nobody seems to be 'Leaving Las Vegas' anymore - in fact just the opposite is true. Just as in the time of the rush Las Vegas real estate has been drawing the attention of investors and new citizens alike. Property Auction & Why You Should Run A Mile From Them That's A Funny Thing To Say About Property Auctions; They're All The "RAGE, Aren't They?"From The Desk Of Colm DillonHello Colm here .. Protective Covenants - Buying A Home In addition to zoning, some properties have covenants recorded at the courthouse that "run with the land." These "protective covenants" can put a serious pinch in your plans for a piece of property. Five Things to Help Sell Your Home Fast, and For More Money Selling your home requires some thought and a clear plan of action. Here are five things to consider when you're getting ready to sell your home:1) Know Your BuyersAre most of the homes in your neighborhood being bought by first-time or move-up buyers? Depending on which group will be looking at your home, you'll want to do the things that will make your home appealing to those buyers. The Best Way To Get Real Estate Listings The Real Estate Industry is HUGE and is a golden opportunity for real estate agents. National average home sales exceed $200,000. Reinventing Real Estate, Part 1: Online and Empowered Consumers Are Taking Charge and Paying Less For decades, the real estate world turned in a predictable manner. The roles of buyers, sellers and real estate professionals were fairly well defined and transactions followed a predictable path of yard signs, newspaper ads, open houses and miles of paperwork. Checklist for Buying a Home I had a client who called saying that his bath tub just fallen through the floor in his new home (new to him). Mold had eaten away the floor from the crawlspace up. Flipping Houses for Gold: Three Tips to Help You Find the Perfect Fixer Many real estate investors enjoy "flipping houses," or buying and selling houses quickly for profit. Not all flips are fixers. Successful Property Letting And Management Successful Property Letting And Management is not something that just happens, it is something that has to be worked at, and planned professionally. When a landlord or an agent has a problem let, it is almost certainly to do with the suitability of the selected tenant. Curb Appeal First, lets start with what it is. Curb appeal is quite simply the rate of attractiveness your home projects to viewers from the street. How to Calculate Real Estate Rehab Profits If you are investing in real estate you will face a variety of challenges. First you have to find the right property. Investing In Real Estate Investors With the never-ending changes in our Real Estate Markets real estate professionals are starting to pay attention to the sound of new commission streams of income. Some realtors have either shied away or ran-away from such terms as "Cap Rate," & "Cash-on-Cash Returns. Seller Financing - Six Safety Tips Why offer seller financing when you sell? A higher price, a good return on your money, a faster sale and to sell a property that is otherwise difficult to sell. Some good reasons, but how do you do it safely?1. Real Estate Investing In Belize Any trip to Belize starts fantasies of owning a beach villa, or a jungle resort. There are a lot of North Americans in this English speaking, former English colony. Selling Houses: Psychological Effects of Landscaping Buyers think they care more about the inside of the house than the landscaping, but in reality, most buyers won't even get out of their car if the front landscaping lacks the promise of great details inside. Therefore, your landscaping needs to arouse buyers' expectations and entice them into viewing the inside of your home. Fantasy Gap [fast money in real estate] I was in the rental business for seven-years, made 1.3 million dollars the first five years, got ill, and had to get out of it slowly, but had the money to do it.
|
| home | site map |
| © 2006 TIGER MEDIA |
