Cash flow positive property

After my post of of below thread.
http://somersoft.com/forums/showthread.php?t=106768

I got few txt/pm asking how we can find positive geared property.

I believe in Capital Growth and happy to take $$$$$$ chunk in one go then getting paid on drip ($10-$50 per week)

So rather than replying individually, I thought I ll post another simple hack here
(Considering Sydney metro market)

? Buy a block of land in new land release in outskirts of Sydney
? Spend around $300K to grab a corner block (550-600 sq meter)
? Build 2 story home facing one side, and double garage facing other side of the street
? Estimated construction cost $450k (house) + $50k (garage later to be converted in to GF)
? Total spent $800k @ 6% (interstate+ PMfees+ other cost) = $48,000 $923 p.w
? Use CDC if possible for planning approval , if not go thru council with Home and garage application only
? While building or prior, ask builder to run water, gutter, electricity to garage (in view with converting GF
? Once you get OC, convert garage in to Granny flat (apply to council and STCA)
? Grab $550 Rent for main house, $350 for GF = total rent collected $900
? You are out of pocket by at best $923-$900 = $23 p.w
? Claim depreciation + tax benefit (if available)

Above are rough calculation, please carry out your own DD and area research.

Cheap regional so called positive geared properties aren?t exactly what it looks , they have
Higher maintenance cost (due to being old)
Higher council rates
Higher vacancy rates (at times)
Low capital growth
Higher PM cost

I rather prefer NEWER property in Sydney metro area then having one in regional area.

p.s there are other strategies like NRAS, etc. but they are too complicated for me ..so I don?t know much about it.
I have helped a friend and two SS lurkers to execute above in Ponds area and it really worked out well with recent double digit growth.

CG+ Cash flow = Happy Investors!
 
All of your arguments are flawed.

Higher maintenance cost - No i don't think so. The cheap nature of the properties suggests a low starting point which is fairly easy to keep status quo. I have a friend of mine with an OTP apartment that had its dishwasher malfunction and ruin the timber flooring throughout.

Lower capital growth - No i don't think so. Buy 1st & foremost somewhere for either natural or created capital growth.

Higher council rates - how is that possible? They don't charge the rates based on whether the property is profitable or not.

Higher PM cost - 99% of PM's just charge a percentage of the rent, so could actually argue lower PM cost.

Higher vacancy rate - If you have a property at 200/wk and 1200/wk and there's mass unemployment, which one are people likely to settle for?

Regional area - why does it have to be regional anyway?
 
All of your arguments are flawed.

Higher maintenance cost - No i don't think so. The cheap nature of the properties suggests a low starting point which is fairly easy to keep status quo. I have a friend of mine with an OTP apartment that had its dishwasher malfunction and ruin the timber flooring throughout.

Lower capital growth - No i don't think so. Buy 1st & foremost somewhere for either natural or created capital growth.

Higher council rates - how is that possible? They don't charge the rates based on whether the property is profitable or not.

Higher PM cost - 99% of PM's just charge a percentage of the rent, so could actually argue lower PM cost.

Higher vacancy rate - If you have a property at 200/wk and 1200/wk and there's mass unemployment, which one are people likely to settle for?

Regional area - why does it have to be regional anyway?

i agree with you at some degree .. i am just pointing out one the strategy.

However,

Most NSW regional council has upwards of $2500 a yer for rates.

older properties tend to have more maintenance issue (at times)

In regional area, Most PM fees are around 8.8% where in Sydney can be circa 4-5%

it doenst have to be regional, but i have seen lot ppl buying regional town as most of positive geared property sprukers sell regional stock.
 
No it isn't. It's a thread in the Where To Buy section entitled Cash flow positive property and your opening introduction says " how we can find positive geared property."

If it is in fact a NSW thread, then I think the answer is to look elsewhere. Follow the wave, don't let it come to you.
 
No it isn't. It's a thread in the Where To Buy section entitled Cash flow positive property and your opening introduction says " how we can find positive geared property."

If it is in fact a NSW thread, then I think the answer is to look elsewhere. Follow the wave, don't let it come to you.


i can go on to explain Melbourne market too. brissy rent isn't as high as Sydney or Melbourne market.

However, point of the post is to provide an another alternative.
 
Not a bad idea Mflying but corner blocks can be a pain to get and then there is a lot of wasted space.

Another option is you can just do it with a normal block but build it attached. You then design it so the back yard is split in half with access for the house at one side and the granny flat on the other. Kind of like a duplex. Doesn't even have to be a 450m2 block if it is attached...
 
biz,

totally agreed!

last year we drove to oran park on Sunday afternoon (a day after they finished the process of releasing and allocating blocks in their latest ) and all they had left was 2 corner block. Craig said lot of ppl don't prefer(PPoR) corner block because of privacy and exposure to street issue.

But you never know!!!!

i actually prefer 600+ block for future planning reason..
 
i can go on to explain Melbourne market too. brissy rent isn't as high as Sydney or Melbourne market.

However, point of the post is to provide an another alternative.

Keen to hear your opinion on the Melbourne Market.
At a glance, it appears that Melbourne has terrible yield. Queensland and Sydney are much better. Or am i looking in the wrong areas?
 
I can kind of see the appeal to this but I don't see why you don't build a proper GF from the beginning rather then converting a 36sqm double garage. That would make a tiny GF and surely not rent for $300+

I like corner blocks and find them great for dual occ type places
 
lot of this estates have strict design requirements and have to run it pass thru them before it goes to approval authorities.

once it is approved. land developer doesn't have much say to your proposed development.


Easier and quicker to get things moving to save holding cost on land!

i like corner blocks too (Almost every property i have is on corner block) but it has its pros and cons.
 
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