This 28-room boarding house has undergone extensive work in the past two years, to produce a fully operational and high yielding cash flow positive investment.
The property has a majority tenancy type of tertiary students, with the balance made up of working professionals, returning a gross $4,570 per week, as is currently fully occupied. The owners find the average occupancy finalises around 85-90% each year.
The owners have recently undertaken major seismic strengthening and renovation work to the rear of the building, increasing the earthquake rating to 70%+ NBS overall. This included new roofing at the rear and a significant rebuild of the structure. A full new fire system across the whole property has been installed including hard-wired smoke alarms or heat sensors in every room, while wiring was upgraded where needed and the healthy homes standards addressed.
The property operates well as is and the internal fit out is tidy, however aesthetic refurbishments to upgrade some older elements would assist in increasing income further in time. The major opportunity now is for a new owner to further refurbish the interior, improve some furnishings and increase the capital value of the property.
Further adding to the appeal of this property is the government's release of the interest deductibility discussion document, excluded boarding houses from the new tax rules. This suggests that interest will still be a legitimate deductible expense for this type of property, although we highly recommend seeking professional advice from your account to understand the proposed legislation, which is not yet in force.
The property is registered for GST and the asking price is $1,560,000 + GST (if any). We note the new 2022 updated QV rating for the property is $1,460,000. Evidence is supplied within our Information Memorandum.
A full Colliers Information Memorandum and additional property documentation including LIM are available on request.
Viewings are by private appointment only with our Brokers.
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