An investment option to enhance your lifestyle
There’s no doubt about it, property investment can be a time-consuming, if not all-consuming, process. Deciding on a budget, a location, the kind of property you want to buy all needs to be sorted out before you even start looking. Once the house-hunting is complete and you’ve settled on a property, found tenants and signed the lease, there’s still ongoing contact with real estate agents (or tenants, if you’re leasing directly), maintenance issues, staying on top of rental payments and rental increases. While there are no doubt many benefits to property investment, there are definitely times when investment properties can become an intrusion into your daily life, and a burden on your lifestyle.
However, there are investment strategies that can all but eliminate the hassle involved with investment properties. Serviced apartments are growing in popularity, especially with investors looking for a stable, long-term investment that requires minimal effort, allowing them to reap the benefits without all the hard work.
Quest Apartment Hotels, Australia’s largest serviced apartment operator, has properties in more than 150 locations. A team of researchers conduct intense consultation with the business sector (predominant users of serviced apartments), and ensure a strict suitability criteria is met. This relieves the investor of the time and effort of due diligence, shaving weeks, if not months, from the decision-making process. Instead, it becomes a case of perusing the catalogue of available properties, and selecting one that suits your budget.
A huge benefit of serviced apartments is the long-term lease period. Instead of re-negotiating a lease every year, serviced apartments are usually leased for period of up to 25 years. For investors, this surety of occupancy means that once the lease is signed, the property takes care of itself. What’s more, the rental agreement has built in rental increases of up to 4% automatically built in, meaning investors can reliably forecast their growing income from the property.
This long-term lease also provides a reliable cashflow for the duration of the lease. The serviced apartment is leased to an operator, who then lets the property for short-term stays, like a hotel. The operator is the tenant, meaning that as an investor, you get paid your rent regardless of whether the property is actually occupied or not. You can forecast and budget accurately, knowing that rental income will be coming in over the long-term, without it being interrupted by vacant periods.
Fees and charges
Rents are paid directly to the investor, and are free from management fees, which in residential real estate can range up to 5%-7% of rental rates. Rents are also paid regardless of occupancy giving a piece of mind assurance most investments cannot offer. Should Quest not have anyone staying in your apartment for the month you will still be paid your full monthly rental.
As with any investment purchase, the decision of what, where and when to buy comes down to individual circumstances. For those looking for reliable cashflow without high demands on personal time, serviced apartments could be the solution.