Hi Perthguy,
It would be good to understand what you mean by "I have been running the numbers on apartment/units but I can't make them work" - can you share the numbers?
I don't know much about aparments, so maybe I am looking at the wrong ones but here is an example:
http://www.realestate.com.au/property-unit-wa-mount+lawley-114197171
Asking price $370,000
Rent: $390 per week.
With BoM/St George, Company Trustee, Interest Only Fixed for 3 years at 5.64% the following costs are incurred:
Stamp Duty & Government Charges: $11,980
Application Fee: $1,500
Company Trustee: $550
Setup fee: $500
Legal Fees: $615
Settlement Fee: $100
Monthly Fees: $144
Stamp Duty on Trust: $200
Total Costs: $15,589
SMSF Cash Deposit: $90,000
Loan: $295,589
Minimum Monthly Payments: $1,389.27
Estimated Monthly Rent: $1,690
Gross Return on investment of $90,000: 4.07%
Then you have to account for:
Water Rates: $703.10 PA
Shire Rates: $799.07 PA
Strata Contributions: $1520 PA
Building Insurance: unknown
Landlords insurance: unknown
and suddenly the return on investment (of $90,000) dorps down to 0.71% without insurance included. I suspect with insurance the return would go negative.
Even at 4.07%, my super fund makes a better return. I would forgive this if the apartment had good potential for capital growth... but in Perth, the apartment market capital growth is less than for established house and land in a good area.
If I get a chance, I will re-run the numbers for a house and land example. Also, if I have this wrong, feel free to point out my errors. I am happy to be corrected!