Investing in service apartments can be risky business, especially when local developer’s track records are not very easily available.
The fact that Service Apartments are not classified as residential properties makes it even more riskier to venture into such investment. This meant that the buyers are not protected under the present laws of Housing Developers Act 2002. For more info, click here.
Here’s an interesting article on Condo-Hotels which has similar features like Service Apartments, though it doesn’t reflect the local market, but I guess the principles can be put to good use.
In fact, Locke advises people who are solely concerned with returns against buying a condo-hotel unit. When the tourism industry slacks off, he says, rental revenue can decrease. As he learned first-hand from owning a condo-hotel unit, it can take many years before you see any returns.
“Focus on the location and amenities rather than the revenue stream,” suggests Locke. “Having a condo-hotel unit in a vacation destination will encourage you to take more trips there. It’s the value of those vacations that will be a significant part of your return.”
Source: Businessweek.com
Well, as always, do your homework before putting your money down. You have no one to blame when you bought a male cow to milk…
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