Block of 4 units for $350,000 rent $800 - $900pw 12.5%+ yield.
- Thread starter Nathan
- Start date
You want to know what you are getting as a return on YOUR MONEY that you've spent.
So, purchase price.
If you want to keep tabs on your return based on the current valuation, you will often be disappointed because Cap Gain usually out-paces rent increases for a time, then rents catch up a bit, and then you go around the merry-go-round again.
I bought a joint which initially had a gross yield of 12% some years ago, but then the world found about about the area, everyone bought in and the values doubled in a few short years.
Meanwhile, the rents were slower moving, so after the about 18 months of ownership it had a so-so rent return. Had I have been looking to buy the same property at that time, I wouldn't have bought it most likely.
The rent return on that place based on the money I outlaid to purchase it is over 20%.
Because we used no actual cash of our own in the purchase (PPOR equity) the return would be infinity.
A bit better than a CBA T/D, hey?
yield ok, how about growth/security/cash?
nice buy..
Problem is, you soon run out of deposits for these things when you buy a few to replace your income.
These days, I need more cash than trickling income and maintenance issues so Ive just bought another house in Gladstone which will give about 8% return now, but im going to develop it and make over $1M within 14 months.
Done it a couple of times now and its an easier game.
nice buy..
Problem is, you soon run out of deposits for these things when you buy a few to replace your income.
These days, I need more cash than trickling income and maintenance issues so Ive just bought another house in Gladstone which will give about 8% return now, but im going to develop it and make over $1M within 14 months.
Done it a couple of times now and its an easier game.
Derek, there is no doubt that being able to add value, ie develop that property, can accelerate wealth creation. A great number of people do not have the expertise to do that, and can end up spending the profits on consultants. They may also struggle to find funding, when the financier know that the customer lacks the experience/expertise.
In relation to returns, I am a believer/follower of Jan Somers .... internal rate of return .... as the comparison. I do appreciate that it is more difficult to calculate, with our her program or a similar one, however by being able to bring in the tax benefits etc, does assist in comparing one deal against another, particularly in you "tax profile" position. More importantly, it does the calculation on your actual funds invested, not what you have borrowed from others.
In relation to returns, I am a believer/follower of Jan Somers .... internal rate of return .... as the comparison. I do appreciate that it is more difficult to calculate, with our her program or a similar one, however by being able to bring in the tax benefits etc, does assist in comparing one deal against another, particularly in you "tax profile" position. More importantly, it does the calculation on your actual funds invested, not what you have borrowed from others.
investment AUD 350,000.00
Hi Nath
I am more keen on some thing in MELBOURNE (prefer south east)
or Perth
regards
[email protected]
Hi Nath
I am more keen on some thing in MELBOURNE (prefer south east)
or Perth
regards
[email protected]
