Hi, my name is David, I have been looking at property for a whie now, after reading 0-130 Properties in 3.5 years.
I am from WA and I am starting to wonder if there is any property, between50-70K, that actually makes you money from day one? After looking at many different towns, I can’t find any.
I think prices have simply gone to high to find positive cashflow property priced between 50-70k
Is Steve Mc Nights book, simply outdated and mis leading in todays market in 2003?Currently, I have an offer on a property in Narrogin, a town of about 4000 people in WA. It is priced at $55k, and rents at $110 pw, (ie it fits the 11-second sollution), however it still looses about $37 a week.
Where is this property that makes you money from day one? Is it simply no longer there, like it was back in 1999? Have prices gone to high and killed of the $50K houses that make a profit??
All replies, tips, suggestions would be appreciated,
Regards,
David.
My advice is just to keep looking. There are definately still cashflow positive properties out there (Steve’s book was written in 2003 I believe).
Also, while you are looking, keep reading more books
-Ian
dave and ian
while steves book was written this year the market in Victoria has changed incredibly quickly. i’ve been investing in property since 1996, it finally twigged for my brother at the beginning of the year, he started going out buying as much as he could, about 8 properties all cash pos. he made the comment to me “i can see the window of opportunity closing before my eyes” i thought he was panic buying and exagerating, but no he was exactly right, there are very little opportunities anywhere in Australia today. but there are some so don’t give up you just need to work harder.
westan
regards westan$55000 property for $110 rent
I wish I can find something
like that in melbourneI think that ‘entry-level’ properties are the most sought after, because everyone in the market for a house can afford them. also the cheaper properties in single homes are in my experience more likely to be CF+ve than the more expensive homes. i have seen some good yields for small blocks of units, or even home and income type properties.
keep watching the market. all the talk of a bust is causing major panic, interest rates will rise, and there will be more people wanting to dump their investment properties – which you can pick up for a song, as the market will be flooded with sellers, and hardly any buyers.
keep watching the area where you are doing your looking, and see if you can spot this happening, for example more houses on the market in your price-range. also keep a track of what rents are doing. in the area where I bought for 20K 6 months ago rents used to range from 90 – 120 for a 3 bedroom home, and now it’s 110- 140 per week. quite a big jump.
as rents go up (linked to interest rates rising) combined with too many houses for sale causing prices to soften, you will find your deals. when everyone is sick of property, yelling in a disgruntled manner about how Steve’s method doesn’t work, when they’re all disillusioned and burned and everybody wanders off to do options trading or whatever, that’s the exact time when you’ll get your deals a plenty, and at the price you want. and off we go again around the cycle.
cheers-
MiniYour not the lone ranger there Dave, ive read numourous posts not only on this forum stating the same thing. It is hard to find a cheap property with a pos cf in Perth. I havent been able to find one but instead of giving up ive looked outside my local hunting grounds (could even be called my comfort zone) and have found many 11 sec properties. Looks like your on the right track as youve done the same and have looked regional, however im more keen on Geraldton as the population isnt to bad and its on the coast, and only 3-4 hours out of Perth.
Hi Guys, how are you guys looking for +ve cashflow properties?, they are still out there, just the friday gone i was able to close the deal on 2 more +ve cashflow properties and one being a 5 bedroom home, less than 100 metres from the CBD, with all necessaties. On average now between me and my partner were purchasing a +ve cashflow properties yet they are passive with a surplus roughly every week or every second week.
just keep looking
cheers
s.i.sSave on a regular basis
“People forget that by saving just $3 per day and investing it sensibly over a working life, you’ll end up with around $1 million.”congrats still, sounds great, is that in Aus or elsewhere?
Hi MiniMogul,
yeah there all in Australia, but they are definetly out there.
cheers
s.i.sSave on a regular basis
“People forget that by saving just $3 per day and investing it sensibly over a working life, you’ll end up with around $1 million.”Dave
55k and 110pw is quite common to find…
Whats the rental market there like??
Is the population growing/stable??
Whats the cap growth there like??Its those properties returning 12.5%+ which are out there but harder to find…
In the past few months ive seen in WA
19k 75pw.
55k 170pw
55k 130pw
65k 180pw
65k 120pw
85k 240pw
90k 200pw
100k 300pw
115k 280pw
so they are out there… but consider the risk vs return…
I didnt go any further with any of these… as for me I felt is was too risky..
Im still hunting too…SIS I am soooo jealous[
] (I’m sure others are, too!)
I really think that you have a knack for it, born to buy cf+ IPs I can’t find any. I wish I knew how you did it!!
May be you’re in a secret location with lots of cf+ around you.[:0)]
May be you have a good developed intuition and all you have to do is follow your nose to find them.[]
Or do you have a magic wand and make cf+ IPs just appear?[:0)]
OOOOOOOOH SIS if you knew how I envy you![:0)]Seriously, I admire you.[^]
Do you do this full-time, SIS, and do you have a lot of time to go for long drives to find them? What I mean is do you look for and drive around most days?
Anyone know what kind of car SIS drives, let’s follow him! Any good spies on the forum?[}
]Keep going SIS, good on you!
SIS,
Any chance of divulging the stats of the places you’re buying? In terms of purchase price v rent received? It’s cool if you don’t want to, I’m just curious to know what yield you’re chasing.
Cheers
rHi Celivia,
Theres no real secret, i just have lots of time on my hands, i work nights, but have daytime free, but really its just a passion i have for doing it. At the currnet moment im still at uni, going to tafe next year but i just take one thing at a time,
My days are like this.
12.30am just after midnight, get up get ready and go to work,
8.30 am finish work and home by 9 am
then from 9 am till about 6 – 7pm im free to do what ever during the day time,during that time im lookin at property or either in class or having a quick day nap but thats when i can do the things that most people cant do and its perfect too, cause most buisiness are open from 9-5 and thats when im free and i just love it, and it works out nicely
lol, i drive an old car, not old old but about 11 years old, its nothin special.
To be honest, you really need lots of free time when property investing, if not its alot harder cause your free time may be tied to other commitments, which could be stopping you from finding a great or good potential invesments.
cheers
s.i.sSave on a regular basis
“People forget that by saving just $3 per day and investing it sensibly over a working life, you’ll end up with around $1 million.”
SIS,Any chance of divulging the stats of the places you’re buying? In terms of purchase price v rent received? It’s cool if you don’t want to, I’m just curious to know what yield you’re chasing.
Cheers
rHi Richmond,
Basicly its the same places were everyone is buying, its more that i can beat people to them cause ive had the free time to learn and study the area and its demographics, but mainly if the property is renting for example $150 a week and the bank wants $85 a week, and the property meets my critera it will be a must buy. Its mainly the way i caculate and differentiating the difference between a positive cash flow property from a passive cash flow property. As long as the property is making a surplus after all expense over the year. Then its a must buy, but i dont just buy +ve cash flow property,
When looking for IP, i target 4 different types of geared properties.
1. Passive Geared Properties
2. Positive Geared Properties
3. Negative Geared Properties
4. Neutral Geared PropertiesThen i simply use the offset gearing principle to work out which type of geared property i need to purchase.
cheers
s.i.sSave on a regular basis
“People forget that by saving just $3 per day and investing it sensibly over a working life, you’ll end up with around $1 million.”
Hello again,
I must admit I’ve found a stack of them still around as well… yielding around 9.5 to 10%, decent properties in regional Victorian cities… but we’re not in a position to buy just now… still sorting out some other things like a wedding, but we’ll crank up again early in the New Year, I reckon there will be even more around over the next 12 months or so…
Cheers
rHi Kelvinh ,
Im more of a risk taker so id like to follow up on some of those properties you listed . So could you please post the locations so i can do some follow ups [8D] (especially the 100k 300pw [])
Regards RiskyHi Risky, for your information, i quickly caculated this for you. Pls note i have not caculated cash on cash but the difference between the rental and weekly repayments over 30 years at 6%.
but the best property to purchase would actually be the one for $65,000 rental at $180 a week. The reason begin is that the purchase price between this one and the $100,000 with a rental of $300 a week is that, this one is $35,000 cheaper with already excellent rental, but everyones opinion can be different as for the others here they are caculated, though i didnt bother with the 19 k one it is actually the best one but, i dont like it too cheap and sounds a very risky
Cash on Cash has not be consider, just the difference between weekly repayments and weekly rental.
19k 75pw rent – 28 pw repay – difference $57
55k 170pw rent – 82.50 pw repay – difference $87.50
55k 130pw rent – 82.50 pw repay – difference $47.50
65k 180pw rent – 97.50 pw repay – difference $102.50
65k 120pw rent – 97.50 pw repay – difference $22.50
85k 240pw rent – 127.50 pw repay – difference $112.50
90k 200pw rent – 135 pw repay – difference $65
100k 300pw rent – 150 pw repay – difference $150
115k 280pw rent – 172.50 pw repay – difference $108.50cheers
s.i.smake sure you do the caculations
Save on a regular basis
“People forget that by saving just $3 per day and investing it sensibly over a working life, you’ll end up with around $1 million.”SIS,
Can you very quickly explain the difference between passively geared and neutrally geared?
thanks mate,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Thanks sis for the calcs , Your right but i was only going by the 11 sec rule which makes the 100k 300 pw look pretty appertising[
] Depends how you look at it , using opm id rather pocket the 150 than the 102 becuase the outlay would be the same if you structured the loan right (100% finance opm). Hope you follow where im coming from []and again thanks for you imput[8D]
Can you very quickly explain the difference between passively geared and neutrally geared?Passively geared is almost the same as positive geared, just more cashflow that equals a passive income, and this profit income is then taxable.
Neutrally geared is the property maybe negative but after claimin expenses or depreciation, after you lodge and claim your tax income/rebate it becomes positive. But it may stay negative for a few years until such payments are low enough to make it positive.
Neutrally geared can also be a positive cashflow property, but due to unexpected expenses and liablities such as vacancies it has turned the property negative for that year or period.
cheers
s.i.sSave on a regular basis
“People forget that by saving just $3 per day and investing it sensibly over a working life, you’ll end up with around $1 million.”
] (I’m sure others are, too!)
]
])
You must be logged in to reply to this topic. If you don't have an account, you can register here.
