Cash Flow Play

[spanna]

Time to start changing it up a little bit for some cash flow for me.
My next purchase NEEDS to be high yielding. So I?m thinking potentially 70s 80s style duplex that needs some work (very surprised at how well recent reno?s have turned out and the price we did it for) and also has granny flat potential. Looking in established Suburbs of North Perth say Duncraig/Carine/Hillaries/ Balcatta all have the type of thing Im looking for.

My rough numbers are
Initial purchase - 350-450K depending on condition Say 400K
Reno - 15K (This is substantial more than we just spent on a full Reno. We would be doing all the work ourselves)
GF build - 80K (Also mostly done myself)
All up - 500K
Front unit should rent for 400pw rear GF 350 = 750pw
500K @ 5.5% = 2250pm
750 = 3000pm

Starting to look ok. question I have is do you think people would want to rent something like this? I mean we where sub leasing a room in a rental for 200pw I Darch and never had a problem filling it and that is far from a convenient suburb with all amenities close by!

Thoughts?

 

[thatbum]

I dont think it would be a problem to find tenants as long as the area was reasonably central - but I think the main problem would be finding a duplex where you can actually build a granny flat. Also within that price range.

Most of the older duplexes are not survey strata'd.

 

[MTR]

Time to start changing it up a little bit for some cash flow for me.
My next purchase NEEDS to be high yielding. So I?m thinking potentially 70s 80s style duplex that needs some work (very surprised at how well recent reno?s have turned out and the price we did it for) and also has granny flat potential. Looking in established Suburbs of North Perth say Duncraig/Carine/Hillaries/ Balcatta all have the type of thing Im looking for.

My rough numbers are
Initial purchase - 350-450K depending on condition Say 400K
Reno - 15K (This is substantial more than we just spent on a full Reno. We would be doing all the work ourselves)
GF build - 80K (Also mostly done myself)
All up - 500K
Front unit should rent for 400pw rear GF 350 = 750pw
500K @ 5.5% = 2250pm
750 = 3000pm

Starting to look ok. question I have is do you think people would want to rent something like this? I mean we where sub leasing a room in a rental for 200pw I Darch and never had a problem filling it and that is far from a convenient suburb with all amenities close by!

Thoughts?

Hi Spanna
Have I missed something, the entry level of $450K???? North Perth, I know would get nothing at this price, perhaps a 2 bedroom unit.
The other areas, similar I would expect $450K way too low??

Also, need to add buying costs - stamp duty and of course the holding costs while renovating.

I think the g/flat idea is great if you are doing it yourself, I would prefer this strategy close to the city or close to university.

My g/friend has just completed 2 g/flats at the rear of her property in Inglewood, has lane way access for both, both internet access, she pays for water and electricity and she gets $350 for each g/flat, they are very nicely finished, only 1 bedders, however its location and proximity to Edith Cowan Uni. Ticks all the boxes. No property management fees she does this, both are not legally approved. No issues, she had people lined up to rent these out.

Cheers
Marisa

 

[spanna]

Sorry northern Subs of Perth - yeah the target would be young couples maybe 1 works 1 at Uni still ...... I agree Central Subs close to the action would not have a problem renting but the buy in is well over 450 like you said. I have seen a few older duplexes in the suburbs I said before and even places like Carlisle and east Vic Park in the price range..... As far as putting a GF on a survey strata lot I thought the new WAPC provisions aloud for this as long as minimum land size and access was compliant?

 

[thatbum]

As far as putting a GF on a survey strata lot I thought the new WAPC provisions aloud for this as long as minimum land size and access was compliant?

Yes survey strata without CP is fine assuming the usual requirements - but the issue is many of the older duplexes are not currently survey strata'd.

Most are older style built strata, or even community title. Converting to survey strata is an extra cost, and would need the permission of the other lot holder. So it can be quite complicated.

 

[MTR]

Sorry northern Subs of Perth - yeah the target would be young couples maybe 1 works 1 at Uni still ...... I agree Central Subs close to the action would not have a problem renting but the buy in is well over 450 like you said. I have seen a few older duplexes in the suburbs I said before and even places like Carlisle and east Vic Park in the price range..... As far as putting a GF on a survey strata lot I thought the new WAPC provisions aloud for this as long as minimum land size and access was compliant?

Dianella is an area you should look at, the older duplexes in the main have very large land component, they are also very sort after when they hit the market they get snapped up with multiple offers/buyers.

Don't know how this would work in Girrawheen, same you can get some duplexes, large land component, much cheaper entry level, not sure about your client base here though, would need to research this more.