Non Rural p+ve geared properties

Hi PropertyPlus
Welcome to the forum!
I’m not quite sure what you mean by ‘Qld’ – it sounds like you are not one to venture out of the capitals, so does ‘Qld’ include gold coast? townsville/Cairns? etc?
It would pay to do some thorough homework in light of the softening market in most (but note, not all) places. New apartments you are looking at may be fine for now, but how many more have started to be built in your area, and what will the supply/demand ratio be like in say 1-2 years when the ones under way are finished?

Also be careful about rent guarantees – they are often inflated and you pay for them with a higher purchase price.
Good management is hard to find – check it well before proceeding. Good tenants – we all want those! But can we guarantee them? Best to make a little room for both vacancy and extra maintenance just in case, so your final bottom line is more conservative than optomistic. If all still checks out OK, then why not?

6.6% yield is $1760 pa rent.

So if you buy at 80% LVR, you will need

$52000 deposit
$10000 closing costs (approx)
$62000 total.

Your approximate expenses may be
$2500 rates
$1230 (i am guessing at least 7%) Management fees (are probably more)
$500 repairs (shouldn’t be too bad if its new)
$16853.16 Loan repayments (6.5% on $208000 over 25years)
$21083.16 TOTAL EXPENSE PER YEAR

So for a $62000 investment you are losing $21083 – $17600 = $3483 ($66 per week)

Thats ok for a negative geared property that you expect to increase in value.

The problem is that “Quest” have probably already increased a price margin. And if you had to sell in the near future, I am betting that you would be lucky to get $230000 for the place.

Spend time researching all of the above details, or you may be duped.[biggrin]

Lifexperience

I reckon property plus is just marketing NZ properties.

Sorry – I came on a little strong eh!!!!

Hmmmm, I don’t much like renovating properties – that is, slapping paint around on a roller is fun for 2 hours, but i did it once for 4 days and the novelty has worn off. Besides I don’t have time these days, there are fish to be fried and television programmes to be made!! but I digress….

Nevertheless, it’s the disgusting dumps that (if structurally sound) that for a simple 3-5k cosmetic make-over can be transformed – that make the investor more money than the dolled up ones. But there is ‘the hassle’ involved. But you DON”T have to do it yourself. You can either call tradespeople, book them, brief them, do it all with photos, or else use someone on the ground to project manage for a fee (i.e. the rental manager can often do stuff for you for a ten percent surcharge.)

I just bought my fifth property and I will possibly be able to create up to an 18 percent return on “purchase price + 4k spent per unit on cosmetics”, or even 20 percent if I furnish the properties – which has an element of risk involved (tenants scarper with the furniture, as the bond won’t cover it-) so still figuring this out.

But believe me I won’t be there with my paintbrush. Don’t disregard the ugly properties, because you are missing out on $$$$$$ if you only buy the pretty ones.

cheers-
Mini

joy to the world