Who has bought a GENUINE cashflow+ IP in the past 12 months under $300,000?

[beachy]

Care to share the following:

City/town where you bought (address is not needed for privacy reasons): ___________
Purchase price: ___________

Income: __________ vs

Expenses
Interest rate: ________
Loan amount: ________
Rates: _________
Insurance: __________
Landlord insurance: ______
Prop Management fees: ________

CASHFLOW+ : __________

What I don't want to hear...

- Mining properties that cost $400,000 and are returning $800 per week
- New or established properties which AFTER DEPRECIATION is accounted for, the property is cashflow + (to me that's NOT REAL cashflow)
- Commercial properties (usually 10%+ returns, but usually higher entry price to buy)
- After I paid 20% deposit, the property became cashflow+ (well, obviously it would because you borrowed less!)
- Anyone else other than Nathan with his 72 cashflow+ IPs (yes, I know he's a legend)

I have 3 properties now in QLD (2 IPs which are -geared), and looking at buying another by the end of 2013 up to $300,000, but after I run the numbers on IPs I'm looking at, I keep coming up - or neutral-gearing.

Pay $200,000 and it needs to return like $340 per week

Income: $17,680 less expenses below:

Interest: 5.5% variable interest on $195,000 lend = $10,725
Rates incl. water: $2,000
Insurance: $3,000
Landlord insurance: $500
Prop Management fee: $1,000 incl. letting fee
Total expenses: $17,225 = $500 CASHFLOW+

Thanks in advance

 

[starter]

Why is interest at 5.5%? You can get under 5 easily at the moment fixed rates. Also why is your insurance $3500 in total?

I just bought a unit for 201k returning $300 per week, taking into account all purchase costs and expenses it's neutral if not slightly positive.

 

[macca446]

Care to share what the return is, what much you paid and how much +cashflow you're getting?

What I don't want to hear...

- Mining properties that cost $400,000 and are returning $800 per week
- New or established properties which AFTER DEPRECIATION is accounted for, the property is cashflow + (to me that's NOT REAL cashflow)
- Commercial properties (usually 10%+ returns, but usually higher entry price to buy)
- After I paid 20% deposit, the property became cashflow+ (well, obviously it would because you borrowed less!)
- Anyone else other than Nathan with his 72 cashflow+ IPs (yes, I know he's a legend)

I have 3 properties now in QLD (2 IPs which are -geared), and looking at buying another by the end of 2013 up to $300,000, but after I run the numbers on IPs I'm looking at, I keep coming up - or neutral-gearing.

Pay $200,000 and it needs to return like $340 per week

Income: $17,680 less expenses below:

Interest: 5.5% on $195,000 lend = $10,725
Rates: $2,000
Insurance: $3,000
Landlord insurance: $500
Prop Management fee: $1,000 incl. letting fee
Total expenses: $17,225 = $500 CASHFLOW+

Thanks in advance

Hi,
I have a property settling in 2 weeks cost $175,000 will rent $250 to $260 interest rate 4.99% not much cash in pocket but not costing me either, wow your insurance is quite high
Cheers.

 

[Angel]

Wow, I want to know what suburbs you people got your recent IPs.


For Beachy... Your management fee is too low. I think you will be looking at about $1500 a year PLUS letting fees. 8.8% of $340 per week comes in at $30 per week.

With units add BC and sinking funds too. Mine is $1000 total pa which is very low.

 

[macca446]

Wow, I want to know what suburbs you people got your recent IPs.


For Beachy... Your management fee is too low. I think you will be looking at about $1500 a year PLUS letting fees. 8.8% of $340 per week comes in at $30 per week.

With units add BC and sinking funds too. Mine is $1000 total pa which is very low.

Hi Angel,
Purchased in Orange NSW
Cheers .

 

[Elliotte]

I've just been inspecting places and found one that fits that criteria. Haven't put an offer as I prefer something else but if that doesn't work out then this other one is purchase about $200K and returning $330ish currently and will do more with work.

 

[china]

Genuine cashflow positive residential properties are not easy to find, and even commercial properties with above 7% returns are hard to find, regardless of entry price.

 

[redwing]

Why is interest at 5.5%? You can get under 5 easily at the moment fixed rates. Also why is your insurance $3500 in total?

I just bought a unit for 201k returning $300 per week, taking into account all purchase costs and expenses it's neutral if not slightly positive.

What if it goes back to normal levels of 7.5% or so also

 

[monalisa]

We bought one for $230K in May 2012, currently renting for $360pw; 105% financed, before tax approx negative cashflow of $100 pa, after tax positive by around $1,000. We are hoping for a reval of $270K at least.

We also bought a unit for $205K over 12 mths ago, tenanted for $310 pw. It is neutral after tax. Don't like the high strata as much.

 

[westminster]

I think your insurance figures in your sums are too high but here's my best go at an example

http://www.realestate.com.au/property-apartment-wa-mount+lawley-112532399

Rent: $17,160

Interest Only Mortgage @ 5% would be $11,400
Loan Amount $230,000
Insurance: $500 (Landlord plus H&C)
Strata : $1500
Council Rates: $766
Water: $672
PM: $1370

Total: $16,208

+ by $900 or so a year.

I doubt totally positive as it assumes that it's always rented BUT I used the figures of a $230k loan which is 100%.

 

[MrChomp]

We just settled on a property in coalfalls (qld) for $150000 and rented for $290.00. Was originally on the market for $229000 so we had to negotiate hard.

 

[china]

You have done very well to negotiate a property from 229k to 150k -thats a whopping 30% reduction which we often don't see in this price bracket.

 

[starter]

What if it goes back to normal levels of 7.5% or so also

By then rent will rise, otherwise I can cover it easily.

 

[spludgey]

City/town where you bought (address is not needed for privacy reasons): Central Coast

Purchase price: $280000

Income: $405*52= $21060 vs

Expenses
Interest rate: 5.49%
Loan amount: Have to assume full amount plus costs to make it cash flow positive, so $290000. So $15921
Rates: $2300
Insurance: $700
Landlord insurance: As above
Prop Management fees: $0

CASHFLOW+ : $2139

Realistically there will be some other expenses, so let's just say $1000 cashflow positive in year one.

 

[D.T.]

I think your insurance figures in your sums are too high but here's my best go at an example

http://www.realestate.com.au/property-apartment-wa-mount+lawley-112532399

Rent: $17,160

Interest Only Mortgage @ 5% would be $11,400
Loan Amount $230,000
Insurance: $500 (Landlord plus H&C)
Strata : $1500
Council Rates: $766
Water: $672
PM: $1370

Total: $16,208

+ by $900 or so a year.

I doubt totally positive as it assumes that it's always rented BUT I used the figures of a $230k loan which is 100%.

Probably the only property in this thread so far thats in metro area. Probably wouldnt get 100% finance on it though due to being sub 50sqm?

 

[beachy]

Thanks for your responses so far...keep them coming

I want to see how many people on this large forum are buying properties that are cashflow+. Everyone raves about them but I cannot see many investors ACTUALLY BUYING THEM. As China pointed out, they're hard to find.

Living in QLD, I'm also amazed by the low cost of strata and council rates (incl. water) that a few people have posted here - those costs are about 1/3 of what I currently pay here

 

[MrChomp]

You have done very well to negotiate a property from 229k to 150k -thats a whopping 30% reduction which we often don't see in this price bracket.

Yep we decided to see what sort of reductions are possible. Made offers on 4 properties with around the same starting price. We got one to $165000 but were keen to keep going. from my experience people are afraid to put in low offers, My strategy is to only look at properties that have been on the market for 3+ months and get my finance sorted so that it is not subject to finance.

From my experience there are two types of people who have had houses on for 3+ months. People overpriced who won't move and people who are desperate to move on with the next phase in there lives.

The best results I have found are to offer a firm price as a once only offer valid 48 hours. As soon as you bring negotiations into it you won't snag a deal.

 

[spludgey]

I want to see how many people on this large forum are buying properties that are cashflow+. Everyone raves about them but I cannot see many investors ACTUALLY BUYING THEM. As China pointed out, they're hard to find.

I disagree, in regional centres in QLD it's not all that hard to find properties returning 7.5%+. At 5% interest rates, that's what you need for a slightly cashflow positive property.

 

[geoffw]

You didn't want commercial properties- you said they were too expensive. But I've just exchanged on a small commercial property for $200k returning 13% gross on total acquisition price. The only expense is insurance as the tenants pay rates, land tax and maintenance. It's two shops in a large rural centre.

 

[Tim86]

I got a property for $305 000 about 6 months ago. 10 k's from brisbane city in Salisbury (not flood affected). It was a deceased estate where the new owners were just chasing a quick sale rather than top dollar. It needed renovating.

It's in a good quiet street.

I spent about $8000 on renos, and $11500 stamp duty.

Gross rent I get is $750 per week because I rent $150 per room multiplied by 5 rooms. After electricity and water, internet, rates, insurance, I see about $200 profit per week. So that's about $10 000 per year.