Positive cashflow IP?
- Thread starter wally
- Start date
Ah ok this is probably one....just
http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=105172552&f=0&p=10&t=res&ty=&fmt=&header=&cc=&c=95884936&s=nsw&snf=rbs&tm=1220906519
but that is not postive once you include strata, rates, pm etc.
http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=105172552&f=0&p=10&t=res&ty=&fmt=&header=&cc=&c=95884936&s=nsw&snf=rbs&tm=1220906519
but that is not postive once you include strata, rates, pm etc.
Wally - you arent alone. Everyone is looking for them and snapping them up if they find them.
If you want a CF+ property in a capital city you generally need to be prepared to wait for it to go CF+ or to add value in some way. Nowadays most CF+ properties in capital cities are manufactured.
If you're putting down 20% it shouldn't be too hard to get very close to positive, certainly lineball enough to call it almost neutral. It's getting easier to find 7%+ gross yield properties and if you can do this with a decent amount of depreciation and with interest rates on the way down...
Hi Wally,
You could go for something like this:
http://www.realestate.com.au/cgi-bi...t=&header=&cc=&c=41237855&s=nsw&tm=1220911815
Say vendor accepts an offer of $240K, then a bit of a touch up on the unit, paint job & new carpet, etc. Rental would be fetch over the $340 p/w making it very close to CF+ or at least neutral geared.
Close to train station, shops, airport (just make sure not under a flight path) & beaches.
Cheers
George
I've seen a couple around in my area which would have to be close to positive cashflow with a couple more interest rate drops:
* Off-the-plan 2 storey house for $475K with an 8% rental guarantee (with no property management fees) for 24 months.
Obviously you wouldn't be getting 8% return after the 24 month period. Also the CG for the area would likely be lower than others, although still probably strong.
* I've also found a luxury apartment in a newly constructed high-rise selling for around the original off-the-plan price from 2 years ago (high $500s) which the owner would probably lease back for $700/week for a while (as he's holiday letting at approximately $1,400/week). This makes me think I should talk to my relatives who own a hotel and might be able to holiday let the place for me at a better profit margin...... Hmmmm....
* Off-the-plan 2 storey house for $475K with an 8% rental guarantee (with no property management fees) for 24 months.
Obviously you wouldn't be getting 8% return after the 24 month period. Also the CG for the area would likely be lower than others, although still probably strong.
* I've also found a luxury apartment in a newly constructed high-rise selling for around the original off-the-plan price from 2 years ago (high $500s) which the owner would probably lease back for $700/week for a while (as he's holiday letting at approximately $1,400/week). This makes me think I should talk to my relatives who own a hotel and might be able to holiday let the place for me at a better profit margin...... Hmmmm....
http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=104510351
Rentals in that area are around the $120-160 mark, maybe a little more, and this is a 3br house for $100k that looks in decent condition. Pushing it to positively gear with a 20% deposit but it is still pretty close. There's others in the area for less ($95k and an 'all offers' one that has been listed for ages so probably < $80k) but they are HIA order houses with rent capped at $95.
I'd recommend that kim5 buy this one
Rentals in that area are around the $120-160 mark, maybe a little more, and this is a 3br house for $100k that looks in decent condition. Pushing it to positively gear with a 20% deposit but it is still pretty close. There's others in the area for less ($95k and an 'all offers' one that has been listed for ages so probably < $80k) but they are HIA order houses with rent capped at $95.
I'd recommend that kim5 buy this one
Regional areas and rennovations are a combo that has produced +cf for me in the past, this would still work.
I don't invest there but for illustration purposes try blackwater, coal mining territory in qld.
EG
http://www.realestate.com.au/cgi-bi...r=&cc=&c=17364231&s=qld&snf=ras&tm=1220929179
9.2% yeild on asking, offer a little lower and you could get 10% currently appears to be renting around $350ish per week, asking 197k. So this one is close to neutral if you can get a good interest rate. 20% deposit would mean this should cover your rates and insurance too.
NOW...
Find a run down property like this one, purchase for WAY less, (like 150 ballpark fix it up yourself (cheaply, 10k inside outside paint basic stuff etc) and then tennant it at this kind of rate and bobsuruncle, +cf.
Would you want to own a property in Blackwater? That is an entirely different question.
I don't invest there but for illustration purposes try blackwater, coal mining territory in qld.
EG
http://www.realestate.com.au/cgi-bi...r=&cc=&c=17364231&s=qld&snf=ras&tm=1220929179
9.2% yeild on asking, offer a little lower and you could get 10% currently appears to be renting around $350ish per week, asking 197k. So this one is close to neutral if you can get a good interest rate. 20% deposit would mean this should cover your rates and insurance too.
NOW...
Find a run down property like this one, purchase for WAY less, (like 150 ballpark fix it up yourself (cheaply, 10k inside outside paint basic stuff etc) and then tennant it at this kind of rate and bobsuruncle, +cf.
Would you want to own a property in Blackwater? That is an entirely different question.
http://www.realestate.com.au/cgi-bin/rsearch?a=o&id=104510351
Rentals in that area are around the $120-160 mark, maybe a little more, and this is a 3br house for $100k that looks in decent condition. Pushing it to positively gear with a 20% deposit but it is still pretty close. There's others in the area for less ($95k and an 'all offers' one that has been listed for ages so probably < $80k) but they are HIA order houses with rent capped at $95.
I'd recommend that kim5 buy this one
Lol I was thinking about creating my own topic about my plans, but i'll post here instead.
I'll be creating my own cash flow positive property.
Here are my calculations if my offer is accepted on this 1 bed for $180 K that i plan to live in for 2 years first off.
Purchase Price - $180,000
Deposit $36,000
Renovation $14,000
Mortgage $144,000 Offsett Account $55,000
Interest paid on $89,000 at 9%
Mortgage repayments $8,010 PA
Payg $ 2856 a month
Mortgage repayments $ 667 a month $ 167 a week
Will move in for two years pay myself first $200 a week
Save $9,600 pa for two years to help purchase ip 2 and upgrade to a 3 year old car when old one dies.
Put tenant in to my property in 2011
Cash flow positive $63 a week (if offsett account remains at $55 K balance, higher cash flow positve when it increases and rents climb.)
*not taking into account other expenses though*
Rental return
(230 x 52) / 180,000 * 100) = 6.6%
I will rent something for $300 a week or less in rent
Then hoping to buy ip # 2 in 2012 or 2013.
How does it sound? I think its a good start.
Does sound like a plan. Our current plan is simpler:
House for $65k
Fix house for $6-8k (stalled waiting for a plumber - doing this part cash so no interest)
House should rent for $150 or more ($180 is standard for a reasonably nice 3x1)
Subdivide block for $10k (also cash, also no interest)
Build new house for $80-90k
New house should rent for $200 or more ($250 is standard for a new 3x1)
So that's about 15k a year in expenses at 9% and 18-22k in income. Although I'd also quite happily sell both and pocket 14k a year in just plain ol compounding bank interest on the difference, but we're still debating that part. The whole thing will take us quite some time to pull off though unless we start earning some serious money, but those two houses alone could pay for all our everyday living expenses.
House for $65k
Fix house for $6-8k (stalled waiting for a plumber - doing this part cash so no interest)
House should rent for $150 or more ($180 is standard for a reasonably nice 3x1)
Subdivide block for $10k (also cash, also no interest)
Build new house for $80-90k
New house should rent for $200 or more ($250 is standard for a new 3x1)
So that's about 15k a year in expenses at 9% and 18-22k in income. Although I'd also quite happily sell both and pocket 14k a year in just plain ol compounding bank interest on the difference, but we're still debating that part. The whole thing will take us quite some time to pull off though unless we start earning some serious money, but those two houses alone could pay for all our everyday living expenses.
Are you a builder RE?
Down here you'd need to double that at least for a standard 3x1....
R
Jamestown SA, but it will be hard to do the same again. Most houses are over $150k each (vast majority in $200-300k range) and 400sqm of vacant land is worth $40,000. Our block was $65k for 1360sqm. As we are low income earners our best option really is to sell the vacant block for $40k (our original idea) and have a $25k debt on a house returning $150 a week. Can always get another house somewhere else another time.
Edit: no, not a builder, Rivergum homes sells a house that suits our block for $75k and I just added $15k cos noone ever buys houses without adding something. It is just a stock standard house out of their catalogue.
Edit: no, not a builder, Rivergum homes sells a house that suits our block for $75k and I just added $15k cos noone ever buys houses without adding something. It is just a stock standard house out of their catalogue.
Sorry just to clarify, you bought a house with land of $1360sqm for $65K in Jamestown.
If so, how long ago was this?
Thanks.
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