Hints on suburbs with great cashflow positive prospects?

[DanielG]

I have been searching for 2 months now for a unit, villa, townhouse, or house that will provide me with a positive that I could yield approx. 8% or more. I just cant find it!

I need a vehicle property to balance my negatively geared property (I have 3 all marginally neg. geared at the moment) to shore up my cash flow.

Any hints or tips? I cant seem to find anywhere that makes the number works. Should I stop using realestate.com.au as my research hub and source somewhere else? I read posts from ppl here (especially Nathan ) that always boast their great deals. I WANT ONE!!! ;P

Seriously, any guidance would be appreciated.

Regards

 

[Rixter]

I read posts from ppl here (especially Nathan ) that always boast their great deals. I WANT ONE!!! ;P

Seriously, any guidance would be appreciated.

Look where Nathan buys.

 

[jezza]

Daniel

You are not giving us much to work with, do you want to subdivide, renovate or are you just hoping there is one you can just find that will be around the mark of what you want. What area are you looking at or is this a broad over Aust question.

You will find them in regional area and areas close to Hobart/Lanceston in TAS.

Here is one to start you off, not exactly 8% but close enough to

http://www.realestate.com.au/property-house-vic-mildura-106636250

Keep in mind that the future data is something that we cannot control but the areas that generally have high yield generally have low capital growth. So short term wins may not get you towards your long term plans

Jezza

 

[Louie1975]

These deals aren't generally going to fall in your lap. You generally need to add something yourself. Nathan might go to extremes but he has the right idea. He sees potential where others see nightmare and does the work to get himself a CF positive deal.

 

[skater]

I read posts from ppl here (especially Nathan ) that always boast their great deals. I WANT ONE!!! ;P

Seriously, any guidance would be appreciated.

Regards

Look where Nathan buys.

Nathan spends a considerable amount of time working on his portfolio. He buys some in areas that others would see as risky. If you want what Nathan has, then you need to do what Nathan does and buy where Nathan (and what Nathan) buys.

If you just want something with a good yeild, then you need to look really hard at areas and research the prices, both purchase and yeild, and you will find there are some areas that will have those yeilds that you are looking for.

 

[Propertunity]

Any hints or tips? I cant seem to find anywhere that makes the number works. ....I read posts from ppl here (especially Nathan ) that always boast their great deals. I WANT ONE!!! ;P Seriously, any guidance would be appreciated.

Perhaps have a read of this thread:http://www.somersoft.com/forums/showthread.php?t=53662

Alternatively, if you can't find one yourself, then hire a BA or pay some money to Nathan's outfit to find you one

 

[Ridin-High]

Blue chip shares at the moment can give you that yield and you don't have to worry about massive B.A fee's, stamp duty, legals, management intensive asset. + you can sell within 3 days.

I'll put it into house terms

Say Commonwealth bank shares are a house

200k property renting 290pw, No management fee's, no water rates, no council rates, no insurance, no landtax, no vacanty, no calls from PM's, no repairs. Just a deposit into your account of the rent twice a year

You rent by 2012 is forcast to be $372 pw

Residential property is the wrong vechile in my opinion for cash flow

Regards,

RH

 

[jezza]

Say Commonwealth bank shares are a house

200k property renting 290pw, No management fee's, no water rates, no council rates, no insurance, no landtax, no vacanty, no calls from PM's, no repairs. Just a deposit into your account of the rent twice a year

Riding High

Firstly I do invest in shares but the OP post as well as this forum is about property.

If we use your Comm Bank example. That 200k property was worth
Nov 12 2007 - 240k
April 15 2010 - 240k

So if you bought that same property 2 months ago you would have just lost 40k. If you were borrowing to maximum LVR I would imagine you would be getting a bit nervous about a margin call phone call about now.

Jezza

 

[Propertypassion]

My daughter just bought a 3 x 1 in Perth metro area for $250K so Perth may be an option for you

 

[Rixter]

My daughter just bought a 3 x 1 in Perth metro area for $250K so Perth may be an option for you

What suburb?

 

[Propertypassion]

the property is in Swan View, would rent for 350pw

 

[Ridin-High]

Riding High

Firstly I do invest in shares but the OP post as well as this forum is about property.

If we use your Comm Bank example. That 200k property was worth
Nov 12 2007 - 240k
April 15 2010 - 240k

So if you bought that same property 2 months ago you would have just lost 40k. If you were borrowing to maximum LVR I would imagine you would be getting a bit nervous about a margin call phone call about now.

Jezza

Howdy Jezza,

Yeah i do realise the thread starter mentioned he is looking for CF+ property,
and seems like he is banging his head against the wall.
Just providing an idea/option

But say if you was to purchase an actual CF+ property in april and try offload it now.

Purchase 200k April
Sell July 205k

Stamp Duty - 5500
Legals in/out - 3500
Agents fee's 2.2% - $4500
say 90% gearing - LMI $1000
Holding interest - $4000
Other misc transaction costs - $500

205k minus 19k
Still a capital loss of around 14k being conservative.

But yeah its just an option, im not saying either one is better... just in my personal opinion if you are looking for cash flow at the moment shares are a better vehicle.

The lending rules on residential investment property obviously make it safer.

I understand that this forum is about property, i have been a member longer then yourself (unless you have another account) and it will always help your examples by picking the top of the market to do a comparison.
But yeah lets not turn it into a mud slinging contest.

Regards,

RH

 

[Trogdor]

Howdy Jezza,

Yeah i do realise the thread starter mentioned he is looking for CF+ property,
and seems like he is banging his head against the wall.
Just providing an idea/option

But say if you was to purchase an actual CF+ property in april and try offload it now.

Purchase 200k April
Sell July 205k

Stamp Duty - 5500
Legals in/out - 3500
Agents fee's 2.2% - $4500
say 90% gearing - LMI $1000
Holding interest - $4000
Other misc transaction costs - $500

205k minus 19k
Still a capital loss of around 14k being conservative.

But yeah its just an option, im not saying either one is better... just in my personal opinion if you are looking for cash flow at the moment shares are a better vehicle.

The lending rules on residential investment property obviously make it safer.

I understand that this forum is about property, i have been a member longer then yourself (unless you have another account) and it will always help your examples by picking the top of the market to do a comparison.
But yeah lets not turn it into a mud slinging contest.

Regards,

RH

Spot on.

And not to mention that in the next 5 years either:

(i) economic growth continues and your shares start off on a much higher yield and also show strong capital growth. Capital city property on c. 3.0% net yield or less would do show its usual capital gain and would be underperforming shares.

OR

(ii) economy goes to custard. Shares will exceed property again. You dont want to be buying a < 3.0% net returning asset in this environment!!

Run the numbers for yourself.

 

[jezza]

Riding

No mud slinging in here, already doing that in the coffee lounge on speed camera's ( hehehe).

I have always wanted to start the post.

Looking for property anywhere in Aust that has 15+% growth each year and 7+% growth. Can someone point me to the right house. I do agree now is a good time for shares and just bought some for kids so they understand how it all works. Wish I had bought PRR when I got the tip, they have gone up 2000% and at one stage 4000% since I got the tip

Jezza

 

[DanielG]

Hey all, thanks for your input.

Just looking for something that I can buy at say $250K that rents for over $350K. A reno job, or a lease holding product, hell even a subdivide I don't care...

Im not expecting anyone to give me an answer (If you guys found one youd obviously take advantage of it)...I was just hoping on some example of how you guys made cf+ purchases from day 1 ( or close to) to give me an idea.

 

[beachgurl]

I did it by keeping a close watch on the market, going to lots of auctions and bidding when no one else was. I bought a few properties in reasonable streets that needed a small reno and then rented well. Was quite easy to find something after a short research period a few years back but now that there are a few investor groups who've spread the word about that particular area it's not quite as easy as turning up to an auction with a cheque book and scoring a bargain.

I agree that signing up with a BA is your best bet.

 

[Spectre]

I had a client buy in Kingston Qld - think original list was @280k, after building and pest and negotiation think it came down 20/30k off to get the repairs done.
rents @350 pw (I think). Highset place, Fibro, nothing super special.
End of the day your own DD is the go.

 

[NickZed]

You could try somewhere like Musswellbrook in regional NSW. Apparently 4 br homes costing $400k are renting, fully furnished, to mine workers for between $500 and $700 a week.

Bear in mind that this is an area that is heavily exposed to the coal mining industry.... lots of land available, so I am not too sure of your chances of achieving significant capital growth...however the cash flows look good.

The other place that I have been doing some reading about is Orange, in regional NSW. Good quality brick and tile 4 BR homes selling for $350k-$400k and renting for $500 per week - something to do with a Gold mine in the vicinity of Orange. Orange also has other industry that supports the town and a large university. Yet again, lots of land available - might be difficult to achieve capital growth unless you can manufacture equity through sub division / renovation etc.

Just some food for thought for you....

Make sure that you do your own due diligence.

 

[csc2]

Chasing a return like this are you:

http://www.realestate.com.au/property-unit-qld-north+rockhampton-106668159

Dare you to find a better return....

Last Sale Amount: Last Sale Date: Sale Type: Area: Parties Related:
$95,000 14/04/2005 Normal Sale 0 m² No
$103,000 28/03/2001 Normal Sale 0 m² No

Not a huge price increase over the years but the returns are not half bad.

PM me if interested and Ill chase up further info for you.

Siccum Rex!

Disclaimer: I have no relation to any part of this unit, its owner or agent selling.

 

[sahi]

If you're looking for CF+ from day 1, consider house + GF setup. They are not easy to find, I used BA (Alan, Propertunity) and he found me one on the Central Coast, NSW.