Information provided by Quest Properties - 14/06/2012
Is investing in serviced apartments a good idea?
Investing in real estate has been a traditionally lucrative investment option - but this is no news to most Australians who are blessed with one of the most robust property markets in the world and have a cultural understanding of the value of owning their own home.
Australia has had some of the highest home owner occupancy rates in the developed world, for a long time, but investing in serviced apartments is a relatively new real-estate investment strategy that’s slowly gaining traction in Australia, and globally too.
So what are serviced apartments?
Serviced apartments can be a convenient and cost-effective accommodation option for leisure and business travellers looking for extended-stay accommodation that resembles apartment-style living.
What’s the difference?
The difference between more ‘traditional’ accommodation, such as hotels and motels, is that serviced apartments provide more of a ‘home away from home’ feeling. The guest is provided with a self-contained apartment-style environment to stay in where serviced-apartment facilities replace restaurant, bar and laundry services and the guest has the space to live at a comfortable personal pace.
There are some desirable similarities with hotel or motel equivalents though: serviced apartments also have the added benefit of the hotel-like environment that’s often enjoyed by guests - and various perks and discounts are often available for stays of 30 days or more. Serviced apartments are usually fully-furnished while offering greater privacy. And some services like valet laundry are usually available too.
A wide range of accommodation options are available within complexes, from studio apartments to one-bedroom and two-bedroom units.
Is it wise to invest in serviced apartments?
With the steady growth of business travel and tourism in many parts of Australia, and consequently high-to-full occupancy rates, serviced apartments are becoming more widespread across major cities. There are various elements of risk involved when buying serviced apartments as with any type of investment - however serviced apartments offer relatively strong returns with relatively low risk.
Some of the major benefits of investing with the big players, like Quest, include:
- A fixed rental income
- No vacancies (100% tenancy)
- Long term lease
- Tax and superannuation benefits
- No management fees
- No letting fees
- No repair and maintenance obligations
In addition, typical residential properties rely on bureaucratic negotiations with the tenants - as well as the many costs associated with being a landlord – but these issues are mostly taken care of for serviced apartment investors and the management fees are minimal.
Self-managed super funds are the fastest growing segment of the superannuation sector. As a member and trustee of an SMSF, an investor has more superannuation investment options than relinquishing this control elsewhere or to a large organisation.
So where do serviced apartments come in? Many investments are subject to the uncertain market conditions but this volatility can result in financial stress and unpredictability. Investing in a serviced apartment is a good SMSF strategy as serviced apartments can be a relatively safe and predictable investment option – and there are significant taxation benefits associated with SMSF investment too.
If you’re an investor then investing in a serviced apartment is certainly something to consider over the coming year.
For more information on serviced apartments, visit one of the most trusted Australian brands in the sector: Quest Properties.
The above information is supplied by Quest Properties.
Disclaimer: while due care is taken, the viewpoints expressed by sponsors
do not necessarily reflect the opinions of Your Investment Property.
Top Suburbs :
Get help with your investment property
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local mortgage broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus an appointment is free.
We value your privacy and treat all your information seriously - you can check out