If you are thinking of purchasing a Property or Investment this may be of interest to you. Variations do exist for leases, but the majority of the information is the same. Tourism Brokers are happy to explain any part of the process or assist you in any way.
It is important to be realistic with the prices of property and businesses you can afford. The general rule of thumb for Tourism Property as a going concern on a freehold basis is 35% equity and 65% debt with the additional purchase cost of Stamp Duty, Solicitor etc covered with additional funds. For a lease the normal borrowing is 50% of the banks valuation.
Please consider the owners and staff when looking at properties as not all the staff may know a property is on the market. Some sellers are concerned some staff will leave or suppliers may alter supply an arrangement if they find out a property is on the market.
Please schedule appointments to inspect with a reasonable notice. Where ever possible, Tourism Brokers will meet you at the property, often with the owner to show you rooms and answer technical questions.
Caution: It is almost never appropriate or in your interest to discuss price with the owner during any showing. Always work through the agent when it comes to negotiations and be very certain and clear.
Often factors such as the residence, the presentation and state of repair of the property are important as well as the potential to increase / grow the business.
As a rule, first determine what you can afford, what the property is worth to you, and be prepared to pay that amount if necessary. The seller's profit is completely irrelevant to your purchase decision and success with the property. It will be important to advise any conditions for a potential purchase so all factors can be considered with any offer. Often a written offer has more power than a verbal offer
The financial information should include a couple of years revenue history and expense history for one year. With the availability of BAS Statements a reasonably accurate assessment of turnover can be made in a short period after reviewing these documents. Most lenders will require access to all income and expense information for the past three years to gain an indication of how well the property will perform well in the future.
The buyer usually asks the seller to grant a "Due Diligence Period" of approximately 15 days before the buyer makes the final commitment to buy the property and is established in writing in the offer and acceptance or Contract Agreement of Sale.
The deposit accompanying a Letter of offer of Sale is a show of good faith on the part of the buyer that the buyer is serious about the purchase. The deposit is typically held by Tourism Brokers in the Statutory Trust Account or it can be invested if requested to do so.
Tourism Brokers are happy to provide a checklist to assist in this area. Between the agreement to purchase and final settlement, there are a number of steps to meet depending upon the financial institution you are using if any and your requirements. Some of the more common are:
It is common for some training to explain the systems, operational requirements and property / business needs as part of the process either prior or after settlement for a period of between 3–7 days, depending upon the experience of the purchaser and their needs that are negotiated at the time of offer to purchase
At settlement the bank makes the loan to you, the purchaser. You then use the loan plus your contribution to buy the property. The seller via your solicitor gives you a deed for the property. The seller via your solicitor then gives you a bill of sale for the furniture, fixtures and equipment and you take over operation of the property.
Where possible, Tourism Brokers will have a representative at the property to assist with settlement and make the transaction as smooth as possible. If the property is considerable, a professional may be employed for Stock take, but if the property is modest, Tourism Brokers will often assist with the final stocktake to facilitate settlement.