Question “Typical” unit outgoings?

Charlie11

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Hello brains trust
I’m new to the forum (though been reading for a while) and hoping some apartment owners are willing to share their experience. We’re interested in units in Falls Creek (maybe when prices settle again after the spike this year!) but can’t easily find how much the outgoings would be. We’re guessing Body Corp for most blocks would be ~$15k/year? If we allow for some holiday rentals, what’s a typical management fee (10% of the bookings?). Are there other regular payments, to the FC management group or others?
What was rental demand like in winter and the rest of the year before Covid (as optimistic as the agents would suggest??)
We’re not thinking anything too flashy, just a simple 2 bedder.
Thanks in advance for all advice and opinions!
 

chriscross

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Suggest you have a look on Domain or FC Real Estate, see what's available and send in a query via email. Agent will have the information about a specific apartment rather than a general figure. I gather there is an issue with insurance, too, after bushfires spooked some companies, so you might want to check that out. Good luck.
 

currawong

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also if you are renting it out, don't forget to consider cleaning costs, and availability of cleaners. this is one reason that some places don't even try to open in summer. availability of cleaners was a big issue this winter, part of the general seasonal labour shortage

in some buildings there may be a management fee that is not just a percentage of bookings. maybe that's the same as the body corporate fee you mentioned, or maybe not.
 
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emkae

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Other considerations in addition to already mentioned above:

contents insurance when you have tenants
Electricity costs
Some buildings have restrictions on number of days owners can reside in their apartment
Costs for repairs
 
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Charlie11

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Suggest you have a look on Domain or FC Real Estate, see what's available and send in a query via email. Agent will have the information about a specific apartment rather than a general figure. I gather there is an issue with insurance, too, after bushfires spooked some companies, so you might want to check that out. Good luck.
Thanks Chriscross - I did try that but got a barebones response to only one cost (Body Corp). Might try a different agent….
 

chriscross

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Ok. But I got a very detailed response from Christa Zirknitzer about a 1 bedroom apt still on the market. Try around, you will find something, but lots of factors to consider.
 
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Scott No Mates

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  • Outgoings are a shocker.
  • Letting fee runs at the greater of 20% or actual (eg if booked through external agency like Trivago, Last Minute or travel agent)
  • Base management fee
  • Cleaning (weekly or intermediate); linen hire
  • Resort Management (rates/garbage etc)
  • Advertising/marketing
  • Insurance (very limited choice of insurers)
  • Maintenance
 
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PG2736

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We have a place at Hotham. We dont rent our place, just personal use and it costs us between $12 & $15k per year. Whilst the costs associated with renting the place out are high, the rental returns are pretty good if you do need cash flow. The value equation for us is being able to leave all of our gear there, come and go as and when we please, have a home base for the kids as they get older, not have the pain in the arse of packing up and being out of your accom by 10:00am Sunday. The costs of accom are also getting very expensive. We have found ourselves starting to use it a lot more across the course of the year to get out of Melb, go hiking, mountain biking, swimming at Tronah Dredge etc.
 
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Charlie11

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We have a place at Hotham. We dont rent our place, just personal use and it costs us between $12 & $15k per year. Whilst the costs associated with renting the place out are high, the rental returns are pretty good if you do need cash flow. The value equation for us is being able to leave all of our gear there, come and go as and when we please, have a home base for the kids as they get older, not have the pain in the arse of packing up and being out of your accom by 10:00am Sunday. The costs of accom are also getting very expensive. We have found ourselves starting to use it a lot more across the course of the year to get out of Melb, go hiking, mountain biking, swimming at Tronah Dredge etc.
Thanks! We’re thinking the same - intending to use it throughout the year and would certainly prefer the convenience of not packing up, carrying gear and dealing with rentals.
I could cope with outgoings of $12-15k per year to not rent it out, but could only manage that if I didn’t need much of a mortgage to buy the place (which I do!). Perhaps need to wait for a significant slump in value… thanks again for your experience
 

Charlie11

First Runs
Oct 4, 2021
4
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1
  • Outgoings are a shocker.
  • Letting fee runs at the greater of 20% or actual (eg if booked through external agency like Trivago, Last Minute or travel agent)
  • Base management fee
  • Cleaning (weekly or intermediate); linen hire
  • Resort Management (rates/garbage etc)
  • Advertising/marketing
  • Insurance (very limited choice of insurers)
  • Maintenance
Wowsers - that’s quite a list. Thanks Scott No Mates, you’ve sufficiently scared me off the rental plan. I did imagine it would be a bit of a hassle and costly, but seems maybe not worth that hassle to add only a little income towards the costs. Thanks again
 

emkae

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Thanks! We’re thinking the same - intending to use it throughout the year and would certainly prefer the convenience of not packing up, carrying gear and dealing with rentals.
I could cope with outgoings of $12-15k per year to not rent it out, but could only manage that if I didn’t need much of a mortgage to buy the place (which I do!). Perhaps need to wait for a significant slump in value… thanks again for your experience

I have a 2 BR place at Falls and the costs are pretty much as discussed

As long as you go in with your eyes open, it is a great move if you can do it. I look at this as a lifestyle choice rather than a financial investment, as there are better options available to make money

I have a “hybrid” approach to the financial side of things - I rent it out on weekends and school holiday periods but use it during the week.

Using this approach helps to generate a bit of income to offset all of the costs already mentioned

And as mentioned above, we do use it during the year, notwithstanding Covid, bushfires and whatever else has stopped us getting there in recent years
 

CarveMan

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generally true, but depending on individual circumstances and how good your mortgage broker is, there is some flexibility around this
I’ve not gone down that road but I’ve heard that most banks don’t even want to know about it, there’s a particular broker at Buller who is an expert and does a lot of the work. From memory Bendigo Bank are the one most au fait with the process.
 
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Scott No Mates

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I’ve not gone down that road but I’ve heard that most banks don’t even want to know about it
The easiest way around that one is to use a line of credit against the house. It may be a little more expensive but you don't need to go through the expensive process of securing finance (bank will want legals to review the lease, sub-lease, management agreement, valuation fees etc).
 
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