holding costs

[tab]

what does everyone consider to be acceptable holding costs?

im interested to know others thoughts.

i have at times before I had read up enough on property (largely thanks to SS) been up to 150 a week down.

ive come to think I wouldnt want to be paying more than 100 (inclusive or rent vs repayment shortfall and costs) maximum on my next purchase.

i understand IR changes effect this and I obviously want to be CF+ to begin with, but thats a rarity....

 

[joanmc]

Hi Tab
I think that it is very subjective. If your take home pay is 2000pw then you can withstand a lot more than someone on say 600pw. for our case we would only look at cashflow neutral now (unless we could load extra costs into a LOC) or positive as we are only share trading for a living and as the economy gets a grip our income from that may slow.
When we started though and had high take home pay from our business we were happy at about 50-100pw per house. This got very hard though as rates went up last year ( our nodocs went to nearly 12%) and we were negative 1500 pw! that was painful.

 

[tab]

thanks joan

ok, subjectivity is a good point, i understand the higher disposable income the more you can neg gear with an eye to CG (if that is your strategy)

Im just thinking when crunching some numbers a rough guideline to follow.

i figure i can include as one part of my DD the price I would need to pay so that at 7% IR a place is around about or <100pw.

but maybe this is a bit difficult to do with so many factors and investment strategies.

cheers and sorry if my posts seem a bit muddled!