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Am i missing something, Buller realestate

Discussion in 'Mt Buller' started by Ultra2.0, Jun 10, 2020.

  1. Ultra2.0

    Ultra2.0 Addicted

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    just browsing realestate options in Mt Buller, noticed a unit for $450K, and advertised return of $40K Pa after expenses, am i missing something here? why hasnt this sold if that return is available in today current conditions?
     
  2. TOFF

    TOFF Im not the messiah Ski Pass: Gold

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    I’m guessing that ain’t a net return nor a guaranteed one.
     
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  3. Karicta

    Karicta A Local Ski Pass: Gold

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    Length of lease

    Upcoming capital works

    Variable returns

    All play a part
     
  4. rowdyflat

    rowdyflat One of Us Ski Pass: Gold Ski Pass: Silver

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    Belongs in the real estate lies and myths dept.
     
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  5. CarveMan

    CarveMan Pool Room Ski Pass: Gold

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    $450k means it’s probably a 2br apartment, that means that body corporate and rates will rack up probably $10k p.a. plus heating, insurance etc.

    $40k sounds like a hell of a lot of rental income, even if it was possible it probably means you would need to rent it through all the good times of the season where you would want to actually be using it!

    This coupled with negligible capital gain, fluctuations due to poor seasons, climate change and the fact that it’s leasehold so banks will only lend on a LVR of 40-50% means that your mileage definitely will vary and it limits the pool of potential purchasers who don’t have the cash component handy.

    We bought our place as a complete lifestyle choice, right now I could sell it for a profit but a couple of dud seasons in a row would take care of that capital gain. We don’t rent it as we are flexible with our time & come up on the spur of the moment and we think we’d prefer to work harder in other ways to make money in our business so our place at Buller doesn’t need the hassle of rentals.

    That said I know plenty of people who ski all school hols and every weekend so they rent out their place midweek and do pretty well. But it’s compromised and a fair bit of work, they need to be out by Sunday lunchtime etc, I love skiing late in the day on Sundays. So it’s all choices.
     
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  6. Ultra2.0

    Ultra2.0 Addicted

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    It sounded to good to be true, i guess the marketing words were After expenses on the rental income, making one assume that was after lease, body corporate and utilities expenses.
     
  7. luvthabumps

    luvthabumps A Local Ski Pass: Gold

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    kind of a waste of time commenting on the thread really isn't it .......:rolleyes:
     
  8. luvthabumps

    luvthabumps A Local Ski Pass: Gold

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    back OT.

    That's not out of the realms of possibility by any means. We bought our place in 2006 and did a small reno on it (we were doing property development in those days so we were able to pull in resources from Melbourne) It's a 3 br, 2 bath. we weren't looking for that but it was priced well, stretched us a bit at the time, but has been well worth it

    We never rented it out in the early years. Mrs LTB and the kids did about 5 seasons living up there in T3 and I'd come back and forthe as required. Then, as our eldest got towards VCE, we reverted back to schools hols, weekends and IS and decided to rent it out. When we moved to Vancouver at the end of 2016, we considered deoing season rental but, to be honest, Airbnb was really easy and we had a great property manager so I managed it from Vancouver . FWIW we were offered circa $45K cash for the season

    In 2017, we grossed over $70K and the same in 2018 (and we actually had 14 days skiing at the end of the season ourselves) Renting it through Airbnb meant low rental outgoings. It was very good value and the annual nett ROI on our initial investment was >10%

    Last year, rental numbers for us were down significantly but still paid us a net gain after all our outgoings for the apartment.

    Last weekend we made the decision not to rent this year. All but one of our bookings had cancelled because of CV-19 and we don't really need the $$. As @CarveMan said, it's a drag having to be ready to go by lunch on a Sunday so the cleaners can get in if you have a changeover.

    If I was to sell my place now I'd probably realise a capital gain of approx 40-50% , but that's over 14 years so, from a financial investment perspective, buying a place in the Australian alpine is probably not smart, unless you never want to ski yourself (well, that ain't going to happen) Your circumstances change as your family grows older so keep that in mind as well - there will be years when you could make a rental motza.

    Many of our friends, who weren't both passionate skiers, have sold up in recent years as their kids grew up and moved away. We can't ever imagine selling our place - it's a lifestyle and we are both passionate about alpine life in general. There was no snow or skiing last weekend but I was so happy just to be back in the mountains, saying hi to people I hadn't seen since last season and just enjoying the clean air. When we had a financial catastrophe at one stage in our lives, we sold everything else and made sure we kept Buller. Our eldest son (23) has said to us "please never sell this place, there are too many memories " The people we bought it from had owned it for 30ish years.

    Hope that gives some perspective.
     
  9. Donzah

    Donzah Pool Room Ski Pass: Gold

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    Fortunately you owned no horses, boats or aeroplanes.
    You gotta do it for love and passion. The market is too mature yet fickle for profit.
     
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  10. djam

    djam One of Us

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    A number of years back our neighbors asked their son, which one of our properties should we sell,
    the Son replied, any but Buller....

    Cap gain here, since 2008 is very little.
     
  11. Ultra2.0

    Ultra2.0 Addicted

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    fortunately or unfortunatly we have one of those holes in the sky in which i throw a lot of money into, the Aeroplane, but i would never sell it, (now that we have hangarage down to a good level again) and we have a invesntment renatl in a small coastal town, so little capital growth there, but never a vacant week unless we want it for a time.. not a fan of leasehold properties, thats all.
     
  12. luvthabumps

    luvthabumps A Local Ski Pass: Gold

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    honestly, it's really not a big deal and can actually be a good bargaining tool if the remaining head lease is short. To get a renewal, there will either need to be a site redevelopment or a substantial enhancement / upgrade to code to the building. I oversaw the lease renewal at Molony's. We ended up spending circa $750K on the building, split between the commercial tenant (George's Ski Hire) and 16 apartment owners on a pro rata basis according to shareholding and have a new 45 year lease. That will see me out. Anone buying in Molony's has very little to worry about tbhother than that lvr borrowing capacity against the Alpine l/holds is usually lower.

    If you find an apartment with a short remaining lease and a seller who doesn't want to invest anything more into the asset, you can often get a very good deal
     
  13. gareth_oau

    gareth_oau Pool Room Ski Pass: Gold

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    rental management and cleaning expenses?

    How much do the agents slice out of the nightly rental costs?
     
  14. CarveMan

    CarveMan Pool Room Ski Pass: Gold

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    Plenty
     
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  15. Billy_Buttons

    Billy_Buttons Que Sera, Sera Ski Pass: Gold

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    Self manage. It's the only way to make any money out it.
     
  16. gareth_oau

    gareth_oau Pool Room Ski Pass: Gold

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    a lot easier these days with airbnb, but you'd need to know the local market for cleaning and maintenace etc
     
  17. Billy_Buttons

    Billy_Buttons Que Sera, Sera Ski Pass: Gold

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    Easy. There are only a handful of operators (meet with them and talk turkey). We self-managed through Stayz for 8 years, then AirBnB for the last 2 years.
     
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  18. luvthabumps

    luvthabumps A Local Ski Pass: Gold

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    this is key. We have an awesome local who has cleaned our place for years. When we were in Vancouver, I just gave her an extra fee for every booking, which was like a "check in charge" so that in the event anyone had an issue on check in (all keyless) she was available to assist. I think she might have had to do that once in the 2 seasons we were away but the $$ were worth it for the peace of mind. She hasn't been taking on anymore work as she's got so may regulars and also runs her own apartment management biz. She even organises small maitenance items for me as well. We used to use Stayz but I prefer Airbnb and that has been our sole platform for the last 5+ years at least
     
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  19. luvthabumps

    luvthabumps A Local Ski Pass: Gold

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    was just browsing realestate.com.au and the market looks really tight up there. For 2 br there's only a handful of places available, mots of which are in Breathtaker, which has horrendously high BC fees from what I've heard. I don't think I've seen such a limited supply for years. I have a mate who sold his place in Christiana very quickly and with a 14 day settlement so the new owners could get in before this season starts. Plenty of $$ around for Buller real estate at the moment it seems.
     
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  20. CarveMan

    CarveMan Pool Room Ski Pass: Gold

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    Every time I see Mark Adams he asks if I want to sell. A place in our block sold late last winter without even really hitting the market.
     
  21. travelislife

    travelislife One of Us Ski Pass: Gold

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    But he is a real estate agent so wouldn't be doing his job if he didn't ask! Haha.
     
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  22. CarveMan

    CarveMan Pool Room Ski Pass: Gold

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    And doubly so when there’s a total shortage of stock.