FREQUENTLY ASKED QUESTIONS FOR THE SALE OF VILLAS 4, 5, 7, 8 and 9 Peppermint Parade,
Lake Hume, Albury Wodonga

Is purchasing a villa at Lake Hume Resort any different to owning a unit elsewhere?
No. These are strata titled units within a community scheme subdivision. In many ways they do have a greater flexibility of use than a normal unit. You can use your villa for your own personal use as an owner occupier, use it as your own home or holiday house and when you’re not using it lock it up or alternatively let it out to gain additional income.

The Resort offers a letting agreement for this arrangement  or you could use a real estate agent of your choice. They could be let as long term residents to families or corporate who live and work in Albury Wodonga. Alternatively, if you wish to have a guaranteed return on your investment the Resort will lease the villa back on a long term lease similar to the terms and conditions of the existing 20 leases on other properties that are owned by individuals and companies at Lake Hume Resort.

How much return would we get by leasing our villa back to the Resort?
The owners are offering a weekly payment including payment of expenses for the following villas:
Villa 4 and 5 of $520 a week ($27,040 p.a.) to lease your furnished villa.
Villas 7 & 8. -  $550 a week ( $28,600 p.a)
Villa 9 -  $530 a week ($27,500 p.a).

For many years Lake Hume Resort has offered similar arrangements to other investors and leased  back  20 other properties from families and companies.
Please refer to the positive cash flow calculations  for these villas based on various borrowing arrangements.
This return excludes the large benefits to be gained by the depreciation schedules for the buildings and the furniture package which is in excess of $15,000.00.
The depreciation schedule is suitable for taxation purposes and is prepared by a firm of professional quantity surveyors and is part of your contract.

Alternatively if you wished to live in the apartment side of the villa the Resort would lease the studio side for $225 per week ( $11,700 p.a) . The furniture and electrical package would cost $9,400 for the studio side.

If you wished to rent it to families or a business who live and work in Albury Wodonga indications from real estate agents are that unfurnished returns would be between $380 to $420 per week.

If we were to lease our villa back to Lake Hume Resort what exactly does guaranteed net return mean?
Your tenant, Lake Hume Resort pays the outgoings of council rates, insurances, electricity, gas, cleaning, linen, grounds, minor maintenance and the body corporate fees except the sinking fund.

The sinking fund is money put aside to cover future repairs and maintenance of the common property which are the internal roads and pool. The sinking fund would be approximately $250.00 a year. However, for the last five years it has averaged only $100 a year. If you wished to use your property during the lease period your lease could be reduced by a predetermined amount.

What sort of returns would I be likely to receive if I had a letting agreement?
Lake Hume Resort would let your villa for the periods as instructed by yourself the owner. Naturally if you wished to use your villa during the peak periods when occupancy would be high your returns would be reduced. A calculation sheet which is available for perusal shows that Net returns after deductions for outgoings, commissions etc. These show these returns would be similar to those returns of the lease arrangement. These are based on 39% occupancy but are not guaranteed and it is the purchaser’s responsibility to assess their anticipated returns.

How long has the body corporate been operating and what are the approximate costs?
The body corporate has been operating for over five years. Costs have been approximately $750 per villa which includes the insurance of each villa and the administration by an independent registered strata organisation.  As part of their role this organisation  provides correspondence directly to the individual owners and holds an annual general meeting. Under the lease agreement these body corporate costs are paid by the Resort.

How much capital gain could I expect?
Most property analysts advise that the property market has now had its "correction".
Albury Wodonga is a very stable region underpinned by a cross section of industries from agriculture through to manufacturing and education. There are several major employers including the Army (and their associated support industries) The Tax Office, Master Food, Norske Skog, two Universities and two TAFES and several hospitals. This freehold land overlooking the lake is only 15 minutes from the GPO of Albury and Wodonga. The attached links provide details of the attractions and "substance" of the region. Future interest rates forecasts indicate that with the correct financing structure plus the generous depreciation schedules that the purchase of  villas 5, 7,8 and 9 would be cash positive and provide a much higher return that normal residential property.

If you were to sell your villa the lease returns which are adjusted annually by CPI would be transferred to the new owners. Lake Hume Resort has been owned by the same company for over 15 years and during that period Lake Hume Resort has grown significantly and is a major operator in the conferencing, corporate, wedding, group and leisure markets.

As Albury and Wodonga expands east towards the Resort, further developments and infrastructure are occurring to make Lake Hume Village a destination. However, both the 25 year Albury City Council plans and the 50 year MDBC vision for this part of the Lake identify the increasing restrictions for development adjacent the lake which will only increase the scarcity of suitable lake view land.

The bylaws in the management statement which include items like landscaping and architectural standards, future development etc, are there to preserve the standard and amenity of this luxury gated estate. Due to the reduced occupancy if your villa is used as an investment, the type of clientele and the fact that your investment is regularly cleaned and checked there is minimal wear and tear and comparatively minimal upgrade costs. The growth of the Resort has in many ways mirrored the growth of Albury Wodonga which even in the present economic climate continues to defy the gloomy global outlook.

The airport (which is only 7 minutes away) is only one example of the continuing growth of the region. Air traffic has averaged over 14% growth per annum over the past five years.

Apart from the diversity of industries in the region another major reason for Albury Wodonga’s continuing expansion is that Albury Wodonga is at the epicentre of Australia’s major capital cities and at the crossroads of four major highways including the busiest one in Australia, the Hume Highway which is only 10 minutes from the Resort.

Approximately 65% of Australia's population live within an 8 hour drive of Albury Wodonga and the Resort.

How do I purchase one of these villas ?
These villas can be purchased by completing the expression of interest form for the nominated prices. Once accepted by the vendor the purchaser is to provide a $2,000.00 holding deposit where the vendor guarantees to hold your property until two weeks after you receive your contract.

These contracts include all items including covenants and future development and are the same that were used for the previous sales over the past six years. They are tried and proven contracts which are familiar to a couple of local large firms of solicitors who have a rate of $1050 to complete the conveyancing.

If at any stage during this two week period of the contract assessment you wish to withdraw you may do so and have your holding deposit refunded. If you still wish to proceed after you and your consultants have reviewed the contract then a 10% deposit is required with the balance on settlement for an existing completed villa within a reasonable period to allow for financing arrangements if required.

Alternatively villa numbers 7,8 and 9 can be purchased by the same method with a sunset clause of 14 months.

If you require any further information please contact the owner, Jon Ward, on 0260264444.