All the best on offer and tips for investing
ADDING an alpine property to your investment portfolio is an attractive concept. With high rental returns and guaranteed accommodation for you, your family and friends. To help you make the most informed decision, here are our top tips when purchasing alpine property.
1 Method of Ownership
There are various types of property available in the alpine resorts, the most common being private apartments, managed apartments and club memberships.
A common form of ownership is through a company with a shareholding arrangement where ownership of shares is linked with a sub-lease of an apartment. As a shareholder you are a member of the lessee company with rights of involvement in the management and caretaking of the buildings and improvements.
The share and sublease is your ‘title’ to ownership and in many cases, you may register that interest at the relevant Office of Titles.
You should be clear as to the method of ownership and seek appropriate legal advice where there are any concerns.
2 Length of Lease
The vast majority of interests in Alpine land come in the form of long term crown leases. The Crown retains ownership of the land, but leases it out for long periods, usually 50 years or more. When you purchase an interest in Alpine land under a crown lease, you are purchasing a sublease interest for the remainder of that crown lease. While the crown lease is likely to be renewed and the building will remain, there may be a requirement to upgrade the building before a lease is renewed.
Be sure to confirm the end date of the crown lease and factor the age and condition of the building into your calculations.
3 Permitted Use
Do you want to use the property for personal use, rental returns or a combination of both? Some properties have compulsory management and letting agreements, some allow combinations and some are simply own your own. We suggest you look for a combination with the right to reserve the premises for your own purposes if you so decide. Alpine apartments can provide great rental returns during and outside of the snow season.
If a compulsory management agreement is required, check for overall management fees, and whether these are inclusive of third party agents and suppliers.
Use of a property as a commercial enterprise such as a cafe will likely be restricted by the terms of the lease. Look for commercial arrangements and tenure to suit your business proposal or project. There are restrictions that may need to be negotiated to conduct business operations within the resorts and ski field areas.
4 Fitout of apartment
Is the property fitted out and sold with all the modern conveniences? Most properties in an alpine resort are sold on a ‘walk in/walk out’ basis with all the mod-cons provided. Having furniture delivered to the property can be difficult during the snow season.
Be careful to ensure that a detailed inventory is included in the contract and check the condition of items at the time of signing the contract. These items should be in the same workable condition on settlement, fair wear and tear excepted.
Before buying any property you must always be sure of your finance. The type of leasehold arrangement for alpine property has a significant impact on whether banks are prepared to lend. Registration of alpine leases has made accessibility to finance more readily available.
There are numerous methods of structuring finance and this needs to be examined depending on your use of the premises and your financial circumstances.
The alpine resorts present wonderful lifestyle and business opportunities with the resorts contributing over $1.5 billion to the Australian economy annually.
TressCox Lawyers are able to help and advise with any of your proposed alpine interests and transactions.
FUTURE INVESTMENT: Seeking the right legal advice when buying alpine property is an absolute must.