I've thus far ignored the expenses when calculating the rental yield. But I never knew people did? You must have some crazy deals to be able to get 7%+ yield AFTER expenses (or are you saying 5%+ is good after expenses - as long as it covers repayments after expenses?)
Most people ignore expenses because they are deducted off taxable income.
So for every dollar they lose they get back 42cents (or whatever tax % they pay) of taxes paid.
This includes depreciation which will also increase the losses.
I don't know the exact details of this particular property, all I'm saying is what makes this buy better than others?
Buy, hold, pay and pray takes decades, how does this property have above average potential?
What does it have that others don't and how does it beat the average?
I'll also quote an old post of mine
1. All debt is bad if it costs me to keep it
2. An investment earns, a liability costs.
3. Any liability should be turned into an investment asap.
3a. A future investment purchased as a liability should be ideally be funded by other investments, and preferably P&I loans.
4. If it is'nt CF+, then make it!
5. If you can't make it CF+ quickly, the market is too hot or you dont yet have enough $$$.
6. LMI is bad, and means your LVR is too high.
7. He who want it most, pays the most. He in a hurry always pays too much.
8. He who tells you to hurry usually gets a commission.
9. Equity = Wealth, Equity = Cash, Equity = ability to buy when others are going broke.
Equity is king! Long live Equity!
© Piston Broke