Cashflow positive and neutral

I think that it is hard to find good value on the Central coast although prices are definitely depressed. 9% gross rental yield combined with good prospects of capital growth are non-existent on the central coast.

He sent Emails to those on the mailing list.



Climbom if you don't want to pay the price for someone doing a reno, why not buy unrenovated and add the equity yourself?

Can you please share how you are determining if a property is CF+?
Eg do you count only the money borrowed ie 80% for example.
My idea of CF+ is based on ALL costs ie interest on 100% borrow + settlement costs etc.
I think your way of calculating is different to mine.
 
I don't do any complex calculations or anything like that. Just whether the rent covers the mortgage repayments on a principal and interest basis (95% lend).

I am willing to pay for the renos but 30k seems a little too much. I offered 15k more and would have been willing to go up to 20k or so. There's just something a little off putting about 30k more though. Not sure
 
Thanks for your replies. I realise there will be other costs but to me it's great that it effectively pays for itself. Also, after P&I repayments and management fees, there is about $850 remaining after a year so that could pay for the insurance too. So really just council/water rates and maintenance as required, which I'm pretty happy with. I'm just a bit uneasy about the price increase.

So it's not exactly CF+ then asy you say, as that $850 surplus after interest payments won't cover the other necessary expenses.
And the maintenance expenses is the most unpredictable expense.
Best to calculate figures as accurately as possible before committing, if cashflow may be a problem for you.

Good luck.
 
It is after interest and the equivalent of the principal.

We don't have problems with cash flow per se and have a good savings history, it's just that our income isn't the highest so we want to find properties that are CF+ at least in regards to repayments, in order to maximise our serviceability (and be able to buy additional properties).
 
You've just got to look.

Noticed Nathan had a 7 day trial on his Deal Finder for Somersoft members, he does a lot in those areas so might be worth a look at.

Depending how handy you are this might be worth a look...

As a comparison this property is currently the cheapest one available for lease in Lethbridge Park.

Even this one might be worth a look if you don't want an auction, or just to get an idea of the property.

Took me 10 mins to find those in 2770. There's plenty more in similar areas or larger regional areas, it can take time but they're there.

Hi Skater,
I am interested to take the 7 day trial Nathan is offering. Can you please forward me the details?

Regards
Velli
 
Plenty of apts in southwest sydney that are cashflow neutral or tve

Example: apt in liverpool
Price : 210k
Rent : 300pw
Strata:450 per qtr
Council:950 per annum

The apt price was 230k just a few months ago.

For you info
 
So....you're only interested in properties that ;

  • are under 200K in purchase price
  • don't need any immediate renovations
  • are cashflow positive on a P&I basis
  • have reasonable growth prospects
  • low vacancy rates
  • are in short supply

Is that the full list cimbom before we start looking, or is there anything else ??

4 bedroom, 2 bathroom and a pool
 
Take a longer term view.

It takes me on average 2 years to become CF+. But the shortfall is pretty minor. There is always some fixing up and bits and pieces that will eat up some cash. It's like most investments - if it was as easy as waltzing in and making a profit straight away everyone would do it.

As for the 30k increase - are you buying one of Nathan's :p
 
I don't do any complex calculations or anything like that. Just whether the rent covers the mortgage repayments on a principal and interest basis (95% lend).

I am willing to pay for the renos but 30k seems a little too much. I offered 15k more and would have been willing to go up to 20k or so. There's just something a little off putting about 30k more though. Not sure

That's not really giving you a true indication of what the cash flow really is. Better to know what all the costs are so you don't make a needless mistake.
For example one IP may meet your criteria but have high fees (strata, council, etc) so not all IP's are created equal even though, by your calculations they may be.
Why pay P&I if you are starting out? Better to have the cash available to you for further purchases.

The price the previous purchaser bought it for is irrelevant to your deal. You need to know if the price you pay is a good deal for YOU. I did a $25K reno and the price after reno was $85K more. But I got it very cheap and it was still a decent price in the market.
 
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