Info on first ip

First of all happy new year to everyone. Hope 2015 brings success to anyone who goes out and earns it.

I am hoping to purchase my first ip mid year this year, if not a bit earlier. I am just wondering if anyone has opinions on positive cash flow deals around 250-300k in Wollongong, central coast of nsw or western Sydney.

Am i dreaming to get a positive cash flow property in any of these areas in that price range. I currently live near Liverpool that is why I was hoping to get a property near these areas so if there are any problems I don't have far to travel to go and fix them.
 
Welcome Brian.

I don't think you'd be able to acquire a positive cash flow property in Western Sydney. Say in Mount Druitt, if you acquire a unit (older style) for $300K, and it rents for $300 per week - that is a rental yield of 5.2%, which will be just enough to only cover your interest payments (assuming 100% financed).

Are you looking for a house or strata properties? How much deposit are you looking at putting in? We (MsAli and I) calculate yield with reference to 105% financed ie 100% purchase price + buy in costs funded from borrowed money.

For the properties you are looking at, I would recommend you calculating your net rent profit / (loss) - include rates, property management fee, strata, insurance, depreciation - to determine your net cash flow after tax.
 
I have my ppor with a mortgage of 428k and is valued around 620-640 so I will be using the equity from that property for my deposit and costs
 
Hi

Hi Brian,

In terms of getting a positive cash flow property from day on in these areas might be tough.

But not to worry!!! Over time the property may become positive cash flow when or if the rental yields increase but take into consideration that interest and other expenses may be tax deductable in turn making the property positive cash flow.

Just ensure your property is set up correctly from day one to meet your goals.

Cheers
Johann
 
First of all happy new year to everyone. Hope 2015 brings success to anyone who goes out and earns it.

I am hoping to purchase my first ip mid year this year, if not a bit earlier. I am just wondering if anyone has opinions on positive cash flow deals around 250-300k in Wollongong, central coast of nsw or western Sydney.

Am i dreaming to get a positive cash flow property in any of these areas in that price range. I currently live near Liverpool that is why I was hoping to get a property near these areas so if there are any problems I don't have far to travel to go and fix them.

Brian, will you be willing purchase something that needs a bit of work down in western Sydney? You might be able to get something lower end, add some value (cosmo reno) and increase the rental return on it.
 
Hey Brian

Personally - I think west Syd has had its run for now.

Why the focus on those particular areas?

Cheers

Jamie
 
Thanks for the replies everyone.

Jamie- I like those areas because they are not that far from my house so I can drive there easy to do any work that is required to the house.

Redom- I might possibly buy something that needs a Reno as I am a carpenter by trade for 15 yrs I can do all the work myself.

Jp- I will have my accountant to have a look to work out all the tax deductions and to see if the deductions will make it positive geared.

Monalisa- thanks for the advice
 
First of all happy new year to everyone. Hope 2015 brings success to anyone who goes out and earns it.

I am hoping to purchase my first ip mid year this year, if not a bit earlier. I am just wondering if anyone has opinions on positive cash flow deals around 250-300k in Wollongong, central coast of nsw or western Sydney.

Am i dreaming to get a positive cash flow property in any of these areas in that price range. I currently live near Liverpool that is why I was hoping to get a property near these areas so if there are any problems I don't have far to travel to go and fix them.

Brian,

I think Western Sydney has had a big run so you are missing most of it by now. Central or South Coast have bigger opportunities. If you want to chat about Wollongong or South Coast I can help, if you want the central coast I would suggest you chat to Propertunity. Allan Fox on this forum is highly respected and experienced.

Positive cash flow in good areas is tough to achieve. Depends on your definition of +cf as well. The yields are generally better than Sydney by a little though.
 
Thanks for the advice matt. I have noticed western Sydney has gone crazy. I bought my ppor 3 years ago and in that time it has gone up 150-200k.

I think Wollongong would probably be the furthest south I would go although someone told me Nowra could be a possibility.

I like the central coast as I have a caravan up there where we go every weekend we get a chance. Budgewoi looks ok. I seen a property with 2x2 bedroom homes on the one block of land with both tenanted and happy to stay renting and it brings in 1600/month. Advertised price is 310k
 
What level of cash flow are you looking at?

I think it is worthwhile checking Logan out - part of Brisbane, and good yields.

I don't think there is much point buying regional - just for small amounts of cashflow.
 
I'm not after big cash flow. I'm happy to sit and let it grow I'm in no rush. I heard Logan is a crap area. Alot of crime. Correct me if I'm wrong.

I just want a property that pays for itself
 
I heard Logan is a crap area. Alot of crime. Correct me if I'm wrong.

I think it would be worthwhile doing a search on Logan on the forum and read up views of those who have bought there already. I understand from other investor friends of ours that Logan is better than Mount Druitt NSW - and I can tell you - we love Mount Druitt, and it has worked well for us - starting with properties with high yields (bought a few years ago), don't cost us to hold.
 
I'm not after big cash flow. I'm happy to sit and let it grow I'm in no rush. I heard Logan is a crap area. Alot of crime. Correct me if I'm wrong.

I just want a property that pays for itself

AS others have mentioned social issue reputations can be sweeping, and whilst they may hold some truth they are rarely comprehensive.

By "pays for itself" do you mean mortgage only or all costs, rates, maintenance etc? Have you worked out roughly what gross yield YOU need (incorporating your own tax and financial position) you need to achieve this? This will help you narrow the search for areas and properties.
 
Coota9 western Sydney still is pretty crap with still a lot of crime. I know first hand as my work truck got broken into in my driveway last year and they stole all my tools.

Matt- pays for itself to me is a property that won't cost me anything unless there is maintenance issues. All others costs to be covered by rent. Is this possible to get out of a property. I'm fairly new to investing and don't have any ip's yet (hopefully this year) so that's why I'm asking questions to anyone.
 
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