I'm just curious what criteria you use when actually choosing which IP to buy. (And if anyone wants to share a basic spreadsheets? For some reason you can't search for 'spreadsheet' and the couple that I managed to find seemed pretty complex for a beginner and didn't come with instructions!)
*A bit of background*
I'm new to all this, just done a lot of reading so far.
Because it's my first IP, I've decided to buy in my area because I just feel heaps more comfortable actually seeing a property before purchase. Also, I plan to live in it for 6 months to get FHOG. I live in Cairns.
I've started looking at a few properties, and done up a basic spreadsheet to list the features of properties viewed and work out the true yield.
I've done this as (((weekly rent*50)-(expenses))*100)/price
Expenses = insurance, rates, body corporate and property management fees.
Am I missing anything important here?
This 'true yield' allows me to compare properties by yield, and also do a reverse formula to work out what price I would need if I want (x) yield.
On the other side of the coin is capital gain. I'm a bit unsure of the best way to check this out. Just by having a glance at the graphs of property prices in recent years (by suburb) it seems all suburbs in this area have the same trends. In a regional centre such as this, is there much difference between similar suburbs? By similar I mean the same facilities, distance to city, population demographics, 'niceness' factor etc. Common sense tells me to buy somewhere close to the CBD, schools, shops, facilities, with lowish vacancy rates and without a really bad reputation. However this is not based on figures, and I feel I should be looking at those!! Also, I'm not sure how to figure out CG on individual properties, or if this is necessary. Any advice?
I know which figures you focus on depends a lot on your investment strategy, but I'm guessing even if you want to buy for CG (for example) you'd still want to know the yield!
I'd really appreciate any advice (or links to info)....
*A bit of background*
I'm new to all this, just done a lot of reading so far.
Because it's my first IP, I've decided to buy in my area because I just feel heaps more comfortable actually seeing a property before purchase. Also, I plan to live in it for 6 months to get FHOG. I live in Cairns.
I've started looking at a few properties, and done up a basic spreadsheet to list the features of properties viewed and work out the true yield.
I've done this as (((weekly rent*50)-(expenses))*100)/price
Expenses = insurance, rates, body corporate and property management fees.
Am I missing anything important here?
This 'true yield' allows me to compare properties by yield, and also do a reverse formula to work out what price I would need if I want (x) yield.
On the other side of the coin is capital gain. I'm a bit unsure of the best way to check this out. Just by having a glance at the graphs of property prices in recent years (by suburb) it seems all suburbs in this area have the same trends. In a regional centre such as this, is there much difference between similar suburbs? By similar I mean the same facilities, distance to city, population demographics, 'niceness' factor etc. Common sense tells me to buy somewhere close to the CBD, schools, shops, facilities, with lowish vacancy rates and without a really bad reputation. However this is not based on figures, and I feel I should be looking at those!! Also, I'm not sure how to figure out CG on individual properties, or if this is necessary. Any advice?
I know which figures you focus on depends a lot on your investment strategy, but I'm guessing even if you want to buy for CG (for example) you'd still want to know the yield!
I'd really appreciate any advice (or links to info)....