‘Set and forget’: Cheap apartment you can’t live in

20/38 Jephson St, Toowong, is listed at $180,000-plus.

One of the cheapest apartments currently for sale is minutes from the CBD with guaranteed maintenance and rental income, but there’s a catch.

Located just nine minutes drive from Brisbane CBD, the fully self-contained studio apartment was listed at offers over $180,000 by Andi Kovalcek and Charlotte Tosh of Harcourts Connections.

Mr Kovalcek said it was purely an investment opportunity with long term owner occupation not currently offered – with lease arrangements in place until June 2026, and two further five year renewal options.

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The unit is cheaper than other recent sales as it is at the back of the property with older fixtures.

The serviced apartment is in the Toowong Central complex, and fully managed year round. The top floor unit is being marketed as a “set and forget” opportunity, with operators of Toowong Central having renewal rights on the management and leasing until potentially four years after the Brisbane Olympics.

Serviced apartment demand has seen a resurgence in interest after going through tough times during the pandemic when they were floored by travel restrictions limiting business and leisure travellers.

Demand for such apartments is climbing, with industry analysts IBISWorld expecting the Australian serviced apartment market to have surged 19.9 per cent in 2022-23, with the sector valued at an estimated $4.5billion now.

The complex operators have lease options through to 2036.

The kitchenette has hotplates, a rangehood, microwave and bar fridge.

“The industry is set to grow over the coming years, as tourism activity expands beyond pre-pandemic levels,” was Ibisworld’s outlook for serviced apartments in Australia through to 2028.

“Improved downstream demand will allow new entrants into the industry, contributing to higher enterprise and establishment numbers. Real household discretionary income is set to climb over the coming years, bolstering demand from domestic leisure tourists. Australia will see growing international tourism as airfares decline and global tourism recovers from the pandemic downturn.”

Located nine minutes from the Brisbane CBD.

Mr Kovalcek said rental income in the studio apartment at 20/38 Jephson St, Toowong was about $1080.40 a month – or about $270.10 a week – with annual increases based on Consumer Price Index movements. Gross rental yield would be 7.8 per cent at $180,000, with net coming in at 4.17 per cent given quarterly body corporate fees averaging $1185 and council rates at about $450/quarter.

The building’s sinking fund balance was approximately $140,812.52 with the administration fund balance at $9,184.35 in June.

“The onsite management cleans the room like a hotel service after each guest checks out and both the property and entire site is kept immaculately by staff. A perfect set-and-forget opportunity,” Mr Kovalcek said.

It has veranda space.

A clean functional bathroom.

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The complex is in a prime spot, a block from popular Toowong Village Shopping Centre with surrounding streets also containing pubs, restaurants, cafes and gyms. The apartment has easy access to the Bicentennial Bikeway which leads directly to the CBD, with the Regatta CityCat ferry terminal nearby and the University of Queensland St Lucia campus 3km away.

The apartment is fully furnished with a queen size bed, lounge area with table, desk area with chair, and balcony table and chairs. The kitchenette has hotplates, rangehood, microwave, bar fridge, and there is a wall-mounted TV and internal laundry.

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