FAQs
When is the project due to be completed?
What is a 7% rental guarantee and how long does it last for?
How much is the average nightly room rate?
How much is the remittance expected to be after the rental guarantee ends?
Who will be operating the resort? How will they divide room usage up?
How long can I stay in my apartment if I am an owner?
How much will it cost for me to stay in my own apartment?
How much notice do I need to give the resort if I want to stay in my apartment?
When are payments made to the owners?
Who is responsible for refurnishing the apartment?
What is a capital item and what is an expense item?
Is there a restriction on internal refurbishment?
What are the estimated costs involved to cover rates, taxes, strata fees etc?
Who is responsible for the cost of large capital expenses such as replacing the roof?
What is included in the furniture package and is it really worth $20,000?
How much is the cleaning fee during my owner usage allotment?
How much will the rates and taxes be?
Who pays if a capital item like a TV needs to be repaired?
Who holds the contents insurance and who makes a claim if an item is stolen from an apartment?
How often will refurbishments need to be done?
When is the project due to be completed?
The project is due for completion at the end of 2009 and commencing of operation in December 2009.
What is a 7% rental guarantee and how long does it last for?
A 7% rental guarantee means investors receive a gross rental income of 7% of the purchase price. Therefore a $470,000 apartment will be guaranteed a rental return of $32,900 for the first year (net of all management expenses and operating costs). Like most other rental properties and rental guarantees; strata fees, rates and taxes are still payable however, these figures are marginal when compared to the size of the rental guarantee. This means that investors will achieve a solid overall net return.
The rental guarantee period is strictly for the first 12 months.
How much is the average nightly room rate?
There are a lot of variables that affect the average nightly room rate. The rate differs depending on the type of room as well as whether it is during peak or non-peak periods. An approximate rate is $130 per night ex GST. Geraldton occupancy levels of late have been very good meaning hotels have been able to charge a premium for otherwise second-class accommodation.
The overall standard and quantity of Geraldton accommodation is low which suggests that Quality Edge Resort Geraldton should be able to charge a higher room rate and should experience higher occupancy levels (see comparative accommodation rates for further details).
How much is the remittance expected to be after the rental guarantee ends?
Much like the room rate, an owner’s remittance also differs and can vary depending upon room rates and occupancy levels. These figures are very hard to predict because the stream of income is reliant upon tourism numbers and all other types of guest. However, based on the following workings and after the rental guarantee has expired the remittance is expected to be between 5%-6.5%. Interactive worksheet can be seen here.
During periods of owners utilizing their property they will not receive income for that period but at the same time do not need to pay to stay on the premises.
Who will be operating the resort? How will they divide room usage up?
The resort will be operated by a professional and experience management team overseen by Edge Resorts. This will ensure owners achieve the best possible rental returns. They will distribute guests evenly throughout all rooms ensuring a fair occupancy schedule is adhered to at all times and that all owners receive a fair remittance.
How long can I stay in my apartment if I am an owner?
Owners who participate in the management rights will be able to stay in their apartments for four weeks a year. If owners would like to stay for longer than that a discounted rate can be organised with the Quality Edge Resort Geraldton Management Team. Those who choose not to participate in the management rights are able to stay in their apartments for as long as they like in accordance with the council zoning guidelines.
During periods of owners utilizing their property they will not receive income for that period but at the same time do not need to pay to stay on the premises.
Any owner usage in the first year will be deducted from the rental guarantee for the period that they use their apartment for, i.e. 2 weeks would equate to a total guaranteed return of 6.73% return.
How much will it cost for me to stay in my own apartment?
Owners will not be charged a room rate during their owner usage allotment. The only cost involved will be a small fee for cleaning once you have left.
How much notice do I need to give the resort if I want to stay in my apartment?
A notice period is not required for owners wanting to stay in their apartments as long as it is available.
The Quality Edge Resort Geraldton Management Team receives 57% of the gross income for the services they perform. The remaining 43% is returned to the owner. The Quality Edge Resort Geraldton Management Team covers the Choice Hotels affiliation fee as well as consumables, cleaning, staffing, repairs and maintenance, bank fees, accounting, advertising and usage of power and water.
When are payments made to the owners?
The Quality Edge Resort Geraldton Management Team must account to you within 14 days of the end of each month. Similar to a residential investment you will receive a monthly statement and a monthly payment into your nominated bank account (if applicable).
Who is responsible for refurnishing the apartment?
As an owner you will be responsible for the cost of refurnishing the capital items in your apartment while the Quality Edge Resort Geraldton Management Team will be responsible for the cost of replacing the expense items.
What is a capital item and what is an expense item?
A capital item is any item that was purchased as part of the sale of the apartment. Examples of a capital items include television, cutlery, kettle and furniture etc. An expense item is one that is provided for the guest to use or keep and is not required to be returned. Examples of an expense item include tea, coffee, soap and shampoo etc. To receive an itemised report of capital items please contact the sales agents.
The Quality Edge Resort Geraldton Management Team is required to maintain a refurbishment fund that will periodically be used to refurbish the external aspects of the property. The owner will contribute to this fund based on your unit entitlement. The internal fixtures/fittings and décor are the responsibility of the owner in consultation with the Quality Edge Resort Geraldton Management Team.
Is there a restriction on internal refurbishment?
As the apartment will be let as a part of the resort complex, the Quality Edge Resort Geraldton Management Team will be responsible for all refurbishment and will choose the décor to ensure that all apartments are presented to the same standard.
What are the estimated costs involved to cover rates, taxes, strata fees etc?
The apartments have not been rated separately yet. To discuss further please contact one of the sales agents.
Who is responsible for the cost of large capital expenses such as replacing the roof?
The Strata Company is responsible for expense items that belong to the common property of the strata scheme. An individual owner is only responsible for capital items that belong to them and their unit. In this strata scheme the roof is part of the common property and therefore the responsibility of the Strata Company.
My work is fly in/fly out of Geraldton and I spend about 4 days a month in town. Can I pre-book the times I am in Geraldton and use just one section of the apartment?
If so what is the cost to me? Yes you can pre-book times for your apartment and only use one section as you wish. That way you still receive income whilst utilising your apartment. As noted in the details, you will have 28 days (4 Weeks) free of charge. If you stay more days in a year than the 28 free days then you will be only charged at a substantially reduced rate (to be negotiated)
Can I live in my apartment instead of leasing it back to you? If so, what are my annual fees and can I still use the gym and pool?
All owners are able to opt out of the management agreement with 90 days notice. Permanent residence is governed by local council regulations which state that Central Geraldton and Accommodation usage can only be used for a maximum of three months in a year. If you would like further clarification please contact the local council. If you opt out of the management contract you will still be required to pay the body corporate fee’s similar to any other strata property. This also means you are still entitled to using all common facilities such as the pool and gym. The body corporate estimates can be seen in the product contracts.
What happens in regards to the 4 weeks I can have as free time. Does that come out of the income pool? What if I don’t use the 4 weeks entitlements?
The 4 weeks free means you do not pay to stay, however you will not receive income during that period. If you do not use any of your 4 weeks you will be entitled to receive any available income for all weeks of the year. For the 7% first year rental guarantee, all owners have the benefit of receiving a set 7% income regardless of whether they use all 4 weeks or nothing during the first year of the rental guarantee.
What is included in the furniture package and is it really worth $20,000?
The furniture package includes items required for the apartment to function as a hotel room/apartment. A spend level of $20,000 has been set for each apartment. The items are being selected by a professional team of interior designers and include white goods, electrical appliances, crockery, cutlery, linen, furniture and decorative appointments. (For a detailed list of inclusions please ask an agent for a sales contract.)
How much is the cleaning fee during my owner usage allotment?
The approximate cost to clean a room is $25. This is all you will be charged.
How much will the rates and taxes be?
This information won’t be available until the Water Corporation and City Council update their rate notices. Until that date we estimate approx $700 for each authority (water $700 + city $700 = total $1,400 )
Who pays if a capital item like a TV needs to be repaired?
Repairs are paid by the management team, however, once an item reaches the end of its useful lifespan and is no longer deemed suitable to repair and needs replacing then the owner is liable for the costs. The decision on when the useful lifespan is up and when an item needs replacing is the decision of the management team.
Who holds the contents insurance and who makes a claim if an item is stolen from an apartment?
The strata insurance covers land, buildings and legal liability. It is paid from the pool of funds that is collected from owners as strata body corporate fees. The contents insurance is covered separately and is an operational expense paid by the management team. All claims will be lodged by the management team on behalf of the owner.
How often will refurbishments need to be done?
By rule of thumb refurbishments need to be done approximately every seven years.
Disclaimer:
The answers given to the above questions are designed to provide a broad understanding of the product to a buyer and are not intended to be advice. It is recommended the buyer does not rely on the above information but obtains their own independent advice prior to entering into any binding contracts or agreements.