Tips: in­vest­ing in alpine property

Mt Hotham Falls Creek - - FRONT PAGE - By DAN FLYNN

ADDING an alpine property to your in­vest­ment port­fo­lio is an at­trac­tive con­cept: high rental re­turns and guar­an­teed ac­com­mo­da­tion for you, your friends and fam­ily.

Here are our top tips when pur­chas­ing alpine property.

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 sub­lease 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.

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.

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.

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 mod­cons 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.

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.

The re­sorts con­trib­ute 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.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.