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Want to cognize why Strata Title Hotel Investments can be a "Hell Hole" for the unwary?

Hello, Colm present ...

A RESIDENTIAL INVESTMENT MANTRA FOR YOU!

WHEN ALL ELSE FAILS,
IF YOU CAN'T "LIVE" IN IT PERMANENTLY,
DON'T BUY IT!

What do I tight by that?

Flexibility should be your investment by-word. One of those cardinal 'bench marks' that you should finish.

Strata Title Hotels are built because:

* Major Institutions don't deprivation to own Big Hotels.

* Not to let you to savor human being part of the pack of the progress in the cordial reception commercial enterprise.

So What Are The Facts:

Why are Hotels reinforced and sold-out by Strata Title?

Why do Developer Build Strata Title Hotels?

Developers will say, "strata header allows the intermediate hoarder have a factor of the interior town seeing the sights/business flea market."

What's the realistic apology for Building Strata Title Hotels?

Major Institutional investors in Australia do not privation to own hotels any more. They got into them in the 70's, 80's and generally, did not wallow in the feel.

Why?

The ROI was not 'there.'

Institutions are fundamentally downcast investors and approaching Flexibility in their nest egg. Financial institutions do not run Hotels. So they must move Managers, suchlike Sheraton, Hilton etc to control the edifice for them.

Institutions deprivation to engage the Manager on a Lease Agreement; yet Managers prefer a Management Agreement Arrangement.

Management Agreements are the NORM for the industry, and the Managers are good at maximising their public presentation one-off and the magnitude left-handed done (the investment official document) for the establishment has mostly not been perfect adequate for institutions to spread to poorness to spread out their edifice finance portfolios, even in CBD locations.

So if that is the attitude of the 'Big Boys' and a developer believes in that is a open market now for a new hotel, their solitary separate substitute is to go the strata description highway and go for the 'Little Guys.'

Can I put it other way, near no malign willful.

The asset acting out of hotels is not obedient sufficient for the Professional Institutional Investors who have 'money power' and 'high skill' down them; so let's go for the non-professional investors through strata rubric.

Remember the Big Boys avail yourself of the Big Managers. The Big Managers don't get neck-deep in Strata Title Hotels. That's left to the degrade ranked managers & the less hierarchic developers.

I don't ruminate that is groovy enough, do you?

1. If the complex is run as a HOTEL, you can't be in permanently, 'cause it's too dumpy.
2. If its internal universe IS UNDER 50sqm a buyer will not get bank support.
3. And last but not least if it has a RENT GUARANTEE you've now got iii correct reasons to do a '180 degree' coil and RUN.(See asunder document)

If investors decides they immobile deprivation to buy a strata gong edifice unit, the best high-status script to publication is the Management Agreement and if location are any Guarantees; who is underwriting the Guarantee; HOW STRONG ARE THEY?

Strata heading hotels have a hard-up past unfortunately, because of the laurels and absence of undertake of the developers who put the deals unneurotic AND PROMOTE THEM.

Only a few months ago I helped a unit who had been in one of these strata statute title edifice investing for cardinal (5) age. They oversubscribed for less than they paying. Enough said.

Let's get away from hotels:

Let's suppose your business world has down apart, and you have to cut belongings downward to the clean.

If your asset definite quantity/house has been designed for the share market, it is more often than not smaller than what society regards as a median extent.

You and I cognise what a NORMAL manor and part looks like-minded and feels like; don't we?

When you see Rent Guaranteed Investment Real Estate, have you noticed that they meet don't face like we trust normal houses and units to stare.

Usually they are more slighter and are improved in a involved.

So the premier head is ne'er buy any place that is under 50 quadrangle metres middle borough. Do not reckon 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 collaborator was competent to buy one and the banking concern lent them the jewels.' Yes, you are exact BUT it is as a matter of course a fund agreement through with by the developer near the hill and the ridge will commonly have financial guarantee all over some other funds.

When you come through to sell, a dune won't bestow BUYERS gold for a geographic area low 50 sqm inside area, and that leaves you superficial for a 'CASH BUYER ONLY.' Your Flexibility is wounded, but you can't see the liquid body substance yet.

The definite quantity/house is really not well thought out standard, as compared to what is generally on the marketplace. They can alter from diminutive houses/townhouses in outlying areas or inner town units in complexes being run as a hotel/motel.

The Real Estate DevelopmentCoach

Author of "Residential Development Made Easy"

Copyright Colm Dillon, October 2003
All Rights Reserved.