Ritz Backpackers - 1p5991

When looking at taking on a Back Packers such as Ritz in St Kilda, on Fitzroy Street, buyers may be worried about the aftershocks left over from Covid. But not only have the guest numbers bounced back but Ritz is insulated from any changes in the market. This is because the venue has a long term tenancy agreement in place with a well known Agribusiness. This is for the long term occupation of the full number of 105 beds on site for the next four years. And the tenants manage the venue themselves with the vendor responsible for periodic cleaning and maintenance.

Entrance to the venue is from Fitzroy Street with the reception on the first floor. On that level there are five dormitory rooms, nine double rooms, a common room, TV lounge, a large kitchen, bathrooms and emergency access to Princes Street. The second floor has two management flats, five dormitory rooms, twelve double rooms, laundry, internet room, two sets of bathrooms, an internal courtyard and emergency exits.

There is a brand new lease in place of twenty five years made up of 5+5+5+5+5. Rent for the whole building comes in at $5750 a week including GST. All fixtures and fitting are included with the venue as all bedrooms and common rooms are fully furnished. Note that the venue is designed and set up purely to cater for the farm workers not for the backpackers to receive that St Kilda experience by the beach.

There are a full set of books including P&L, tax returns and BAS that shows an excellent passive income. Infact with the set up that is now in place the vendor rarely has to visit the venue at all. However, the vendor is hoping to use the proceeds from this sale for other opportunities interstate. With a long lease in place and almost guaranteed income for the foreseeable future the vendor has set the asking price for the venue at $1,750,000 giving a return on investment in only four years. The European Hotel beneath the backpackers is also owned by the vendor and can be added to the sale as a package.