opinion

Investment apartments offering high rental returns

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Promoted by Quest

Many people look to include apartments within their property portfolio, with diversification being one of the key building blocks of a robust investment strategy. But often people don’t consider serviced apartments, which can offer consistent, guaranteed high rental returns in an often unstable market.

 Quest Serviced Apartments has 25 years’ experience in serviced apartments and is now the largest and fastest growing serviced apartment operator in Australasia. Before Quest was established in 1988, travellers were limited mainly to hotels and motels. For people travelling for business this meant working, sleeping and eating in one small space. It also made travelling for families and groups expensive, with multiple rooms required to accommodate everyone. Quest identified this demand and provided accommodation in convenient locations, with reliable standards and a flexible living space.

Investors can purchase one of these apartments through Quest Properties. Quest offers rental returns from 6.5 per cent, along with fixed annual rental increases. Investors also benefit from secure long-term leases, full property maintenance services and zero management fees, making Quest Properties a genuine ‘hands free’ investment option.

High rental returns

With an income return from 6.5 per cent on gross rental, fixed annual rental increases and the security of a long-term lease, you can be confident that your Quest Properties investment is always working for you. And because you receive rental earnings 365 days per year, regardless of vacancies, you also benefit from the security and peace of mind that comes with a reliable income stream. Quest Properties also offer fixed annual rent increases at 4 per cent or CPI and are subject to five-year market reviews. So investors know they will achieve consistent growth and avoid the high level of volatility associated with the residential property market. Quest focuses on balanced performance, steady growth and reliable long-term returns.

Property management made easy

From damaged fixtures and fittings to insecure tenancy arrangements, most property investors agree that property maintenance is an ongoing chore and the number one disadvantage of owning a residential investment property. Quest, however, offers full property maintenance services and no management fees. Body corporate administration fees and building insurance costs are covered by your Quest owner/operator, the replacement of furniture and fittings is fully managed by Quest, and unlike residential investment properties, Quest apartments are inspected daily.

Premium locations

Quest has more than 150 locations both in regional and metropolitan areas across Australia and New Zealand.

Quest properties are located in areas of significant corporate growth across a number of sectors. To be approved for development, existing and future locations must:

  • have proven public and private sector investment in infrastructure, industry and commerce;
  • be in close proximity to restaurants, cafes, supermarkets, healthcare facilities and retail outlets;
  • have positive population developments – that is, more people moving into the area; and
  • qualify as a high-activity business centre.

 To ensure success, Quest leverages its close relationships with corporate Australia to identify locations that are ideal for Quest Properties. It is these valuable insights that keep Quest investments generating a high return for investors with very little risk.

Common misconceptions

While obtaining finance may be less straightforward, the fact that Quest apartments are strata-titled as standalone properties makes them more appealing to lenders. Keep in mind that they are a specialist product attracting a lower loan-to-value ratio of around 50 to 60 per cent, which means you will need a larger deposit. Rather than being deterred by this, many Quest investors are starting to wind down their asset accumulation in favour of more reliable income streams. This frees up their cash flow and helps maintain their investment portfolio, while bringing in greater net returns.

Because Quest apartments are generally a positively-geared property investment, many assume that you can’t claim tax deductions. But investors can still claim all allowable deductions for outgoing expenses, like council and water rates, as well as the usual building depreciation allowance. In the case of newer developments, depreciation for furniture items will also usually apply.  

Furthermore, Quest apartments can be purchased within a self-managed super fund (SMSF) structure, which effectively decreases any tax payable on the income generated by your asset to a maximum rate of 15 per cent.

Contact Quest Properties

If you are interested in learning more about buying a serviced apartment, registering your interest or taking a look at the premium locations available now for investment, contact Quest Properties.

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About the Blogger

Quest

Quest

Quest is the largest and fastest-growing serviced apartment operator in Australasia. At present, there are more than 150 Quest sites across Australia, New Zealand and Fiji with more than 5,000 strata titled apartments owned by about 3,000 private investors

Quest’s exponential growth is testament to it successfully meeting the accommodation needs of the domestic and international business traveller.

Quest listens to the needs of business travellers and provides them with a variety of apartment configurations – from studios to four-bedroom apartments, open floor plans with separate living, dining and sleeping areas, fully equipped kitchens and laundry facilities, and a consistent guest experience delivered by professional Quest franchisees.

Quest Properties’ business operation is one based on mutual prosperity, where Australian property investors experience the benefits alongside the business.

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