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where-to for CF+? I have stayed quite select in my local area which has done me well but now I have some cash am looking to CF+ properties.
Any good areas to be aware of please? Sash I am looking to you for help on this one
Cheers all
Ben
Any good areas to be aware of please?
Mistake. It should be interest-only period.ForumiteThanks Belu for the explanation.
My loan is interest only for the first 5 years. Do most people change loans after the initial interest-free period or do they start paying off the principals (which will then be reducing the cashflow)?
Initial interest-free period? where is that and I'll switch lenders now! Most of us here never pay principal on the investment properties. After 5 years, you refinance.
I picked it up for 122.5K, did a 6.5K reno....and just landed a tenant who will pay 225pw.
For this reno, did u DIY or get someone to do it?
Found some last week.
Bought a few for $45k rent $150pw, private sales however.
Val around $85k.
Also got a BIG deal which will rent for 20% yeild cf+ of $750pw after all expenses. (will post details in couple of weeks).
Basically on a normal loan you need around 8% yeild to be cf neutral in todays market.
.
If you are prepared to pay about 600-900K you can get 10-11.5% return on houses in Port Hedland or Southhedland.
I tend to find something I can add value get a decent return which is slightly CF- and then over the next year or two get it to a positive level.
Hope this helps.
4x2 house and land package - $625k
val - $850k min.
rent MIN $1650pw - up to $1870pw.
1650 x 52 = $85,800.
$85,800 ÷ $625,000 = 13.7%.
PLUS
instant CG from $625k cost to min $850k valuation = $225,000.
$850,000 x 0.8 (available capital) = $680,000
$680,000 - $625,000 = $55,000
$85,800 + $55,000 = $140,800
$140,800 ÷ $625,000 = 23.7%
MINUS
tax of approx 25% = 18%.
this is not taking into account depreciation, rates or SD.