how to know if it is positive property?

Viewing 5 posts - 1 through 5 (of 5 total)

fullout
Member
@fullout
Join Date: 2003
Post Count: 233
May 19, 2003 - 5:59 am
HOw do you guys know if a property is a positive return one? Is there a simple formula or guide.
If so, how much positive return in $ terms per month should it be for it to be a good buy?
Is $97 per month extra (after paying back loan, ins, rates etc) enough?
davidfemia
Member
@davidfemia
Join Date: 2003
Post Count: 89
May 19, 2003 - 9:32 am
Hello Fullout,
There is no simple guide. Basically when your income exceeds your expenses, then the property is termed positive. $20 or more per week would be an indication of a good property.
The things you will need to factor in are :
Costs
loan costs
property expenses (propety managers, land tax etc)
Income
Rental per week
Depreciation
The amount depreciable on the building (2.5%)
The amount depreciable on the fixtures and fittings.
These are all tools that can be used in your tax return to make your property profitable.
Of course your taxable income is important, as deductions have more of an effect on a higher income.
What many investors forget, is that you are able to vary your tax during the year. This is mainly for negatively geared properties.
There is software out there that helps you dtermine the profitablity of a property. One was mentioned on this forum known as http://www.ez-rent.com
I haven’t had a chance to test it out yet, but considering its free, you may want to give it a go.
David Femia
Femia Property Group
Property Investment Consultants
http://www.femiapropertygroup.com.au
westan
Member
@westan
Join Date: 2002
Post Count: 1,950
May 19, 2003 - 11:01 am
Hi Fullout and David
i like to make at least $30 per week
So here an example
last purchase $75,000 rent for $155pw
Interest on loan @5.65% 82pw
Rates/water 15 pw
insurance inc L/L 6pw
agent fees 11pw
Total Cost 114
Rent 155
profit $41 per week
so it fitted one of my criteria’s
also interested in what other do
Regards
westan
fullout
Member
@fullout
Join Date: 2003
Post Count: 233
May 19, 2003 - 1:07 pm
where in Victoria can i find such property? 75,000 with $155 per week?
i think there are more of these types in Qld isnt it?
I tried Morwell, Traralgon, Sale, etc, cant find anything with such high rent and low purchase price./
westan
Member
@westan
Join Date: 2002
Post Count: 1,950
May 19, 2003 - 1:45 pm
Sorry fullout don’t want to print the answer because too many people read this forum. but am happy to compare notes, phone 0415 438666 tomorrow. the town/city has population of over 10,000 and is in Victoria
regards
westan