Leaseback Income and How The Cat is Skinned Leaseback Income and How The Cat is Skinned Within Short-Term Letting MLR businesses, the leasing back of a unit, from the Owner at an agreed monthly/annual rental is once again back in favour. However the popularity only extends to those businesses that are performing well with consistent and steady occupancies.  At the time of writing, this principally applies to Corporate Let accommodation properties primarily based within the CBDs of Brisbane, Sydney and to some degree in Melbourne. It was, in years past, popular in coastal based Holiday complexes, but diminishing occupancies and tariffs have not underpinned the viability of Leasing Back units as the return to the Operator can be less than the agreed rental.  i.e. a loss making situation. In the Valuation process there are several approaches to the market value assessment of the Leaseback Component (LBC)of the business, which are:- Identifying the Risk Profit component arising from the LBC and applying a different and lesser multiplier to that figure. Establishing the ‘get-out’ term within the Leaseback Agreement and to then apply an appropriate multiplier that reflects the level of risk. It is the case that some Leaseback Agreements can be terminated by either the Owner or the Operator with 90 days notice, similar to the standard Qld PAMD Form 20a agreements, hence the question is ‘how much more risk is there?’ Others however have one year fixed terms or longer. To we as Valuers, and to our Banking Clients, these are the Agreements and MLR Businesses that are viewed as carrying the highest risk component. This is so, as all markets change and whilst recent years have had seen unbelievable room occupancies, it may not...
Cameron Wicking from Suncorp Participates in the Kokoda Challenge Cameron Wicking from Suncorp participated recently in the The Kokoda Challenge, Australia’s Premier endurance event located on the Gold Coast. Participants trek a km course, taking in fire trails, 12 creeks and summits with 5,000m of vertical elevation. People from all walks of life participate in this event and claim an enormous sense of achievement when completed and are happy in the knowledge that they have helped raise funds to support the Kokoda Kids program, supporting local teenagers to gain a brighter future for not only themselves but also for their families. This is a team event with 4 members per team, who, based on the Kokoda spirit, complete the trek relying on courage, mateship and sacrifice....
The Importance of "Independent" Advice The Importance of "Independent" Advice In July of this year a story arose of the UK involving Barclays attempting to sue mortgage brokerage Savills Private Finance and chartered surveyor Stocker & Roberts Partnership for losses from an alleged mortgage fraud.   It was alleged that Savills fixed over inflated valuations on various properties and were apparently paid quite handsomely for doing so. At the time “no money down” deals were rampant with the cornerstone of this beingthe ability to have a “property power team”.  Effectively these deals ensured that none of the investors money remained in the deal thereby forcing banks to take on the full risk. Participants in the “team” controlled everything from sale and first mortgage, valuations required and sales and/or remortgages.  The incentive of course was a nice fat payment.  Involved was: A dodgy valuer. A dodgy broker. A dodgy solicitor. And a couple of fraudulent mortgages. Without going into the detail of these deals (more can be read here if interested)  the outcome was plenty of property grossly over valued and with no remaining equity in them. So when we talk about “independent” property valuations here at Australian Valuers we really do mean “independent”. We have been in business a long time due to our integrity and professionalism and as registered valuers we ensure you benefit from our industry knowledge and experience thus in return receiving an independent, well researched valuation...
Helpful Checklist For Lawyers   At a recent Barristers and Lawyers conference held in Brisbane I was invited as a speaker to advise on how to instruct Valuers on property matters. Below is a Check List put together and provided to them.     Written instructions to the Valuer: Item Action 1. State the purpose/requirement of the valuation. 2. Titling and Registered Plans should be provided, so as estimations or Google or Internet Plan readings are limited. 3. Good and detailed information up front, results in shorter timeframes and better prepared reports. 4. Provide details of the instructing Party or Parties. 5. If the report is to be addressed to a third party, that party needs to be stated. 6. The basis of valuation ie Current or Retrospective Market Value. 7. The interest to be valued i.e. the freehold/leasehold; the Lessee’s or Lessor’s interest; fractional freehold or a partial interest. 8. The nature of the property, Owner Occupied or subject to tenancy.  A copy of the Lease Agreement(s), if commercial, should be supplied. 9. The date of valuation will be the date of inspection unless otherwise requested....