Looking to buy....what do you think?

G'day all,

Looking to buy a unit from a friend in Mildura. Unit is a 2br, in a complex of 4, single story, fairly close to everything. Looks in fairly decent condition, don't need to spend money on anything. I'm getting a discount, as its from a friend and has not advertised it yet. He's after $80-$85K with a tenant and renting at $135 at the moment.

What do you think? Rates are just under 1000/yr, water is about 650/yr, cant remember body corp but it was pretty reasonable (<$1000/yr). From what I can gather I reckon I can get rent to $150-160 pretty easy in comparing others that are on the market now. Cheapest 2br I can see on the market is $99K for what would seem pretty comparable unit.

This means c/f+ for me pretty close to the start, and will be a nice little earner without expecting much CG.

What does everyone think of this sort of purchase? Any risks I should be thinking about as a regional purchase??????
 
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At $135pw rent and $2650 in outgoings, thats 36% of gross rent eaten up.

At quick sums, gross rent $7250pa - $2650 outs - $558 pa mgmt fee at 7.7% - $300pa LL insurance - $3825 @ 4.5% IO loan repayment = -$83 pa.

I fail to see how this is a nice little money earner?
 
At $135pw rent and $2650 in outgoings, thats 36% of gross rent eaten up.

At quick sums, gross rent $7250pa - $2650 outs - $558 pa mgmt fee at 7.7% - $300pa LL insurance - $3825 @ 4.5% IO loan repayment = -$83 pa.

I fail to see how this is a nice little money earner?

Howdy - the rent is at $135/week which is under market rent. The cheapest 2br rent in the town is currently $165/week at present. Their agency is not keeping up to date and I'll be changing that for sure. The current tenant is signed up to later on this year, so will bump it up then. I'm looking at making it $165-185 (over time of course) which is why I was saying a money earner.

It was more a question of whether there's anything I need to be more aware of by buying in a large regional centre as compared to metro suburbs.
 
I have NSW and VIC regional IP's and one thing I have learned is the rental market is fickle and you can ask whatever rent you want... doesnt mean you will get it :) They boom and bust on rental yield in far more extremes than metro. So for the purposes of cashflow be conservative on the rental figure and treat anything over conservative as a bonus
 
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