Most definitely with most, still a few hanging in but the bear market seems to pick on individuals and separate them from the herd .
Printable View
Which RV operator has the lowest debt ? SUM ? ARV ??
Which is what Fletcher is offering in NZ with its Vivid Living developments :
"Residents moving into a Vivid Living community will enter an Occupational Rights Agreement (ORA) with a 15% Deferred Management Fee (DMF) - lower than most traditional villages. In addition, when the time comes to move on, residents will have the opportunity to share in the financial rewards, receiving 50% of the capital gains, less the costs incurred to sell the home.
“We’ve had the opportunity to shape Vivid Living’s financial operating model in a way that embraces recommendations from the CFFC White Paper released last year. This includes, the buyback of the villa within 4 months, no weekly fees after exit, and ORA exit provisions, where we will payback 10% of the Residence Advance within five days of an ORA ending.”
https://vividliving.co.nz/locations/red-beach
Do these facilities have pools, gyms, recreational areas etc?
https://vividliving.co.nz/locations/red-beach
Aimed at a different market segment at tghis stage for Flelcher.
Year end update
A year of carnage - on average 44% down - and over 50% off highs of 2021
As BP would say prices need to double to get back to their former glory
alokidhir...re debt.
Yes debt can be a burden.However if all things being kinda equal re income but doesnt inflation kill debt.
If you borrow a 100 dollars today and inflation is say 7 ...is your debt next year 93 dollars ?.
I fully agree ...having debt deployed as real assets will work well eventually ....but if u r over geared then rising rates can get u into debt trap also ...U need to have cashflows to service that debt for a while , while rates are working against your valuations of land and buildings etc
Not when properties prices are deflating as is currently the case.
In which case, $100 debt today becomes $107 supported by property which has gone from $100 to $85!
So :
2021 $100 debt : $100 property (LVR 100%)
2022 $107 debt : $85 property (LVR 126%)
And if it continues into 2023 (say 7% interest & 10% drop in property values:
2023 $114.4 debt : $76.5 property (LVR 150%)
Debt is wonderful when property values are on the way up.
Nasty & a killer on the way down - why many a highly geared property company go belly up in a down cycle.