Hi
I have a offer down on a deal now and wanted a few other peoples ideas on this?House with 5 bedrooms on the NSW Coast.
Purchse price is app $900,000. in an area of previous 5-8 % growth etc. The land area is 700 m2
and is level and with very nice lawns etc.2003 model very modern and popular on the beach, no pool but all self contained and nice. has furniture, fittings etc. Very modern and 2 years old.
Restaurnats and facilities close by and 30 minutes to airports and transport.
Holiday rental has shown a 78-82% occupancy over the last 2 years.
Rental for week is 1400 low season to 1800 high season.
My repayments on a 650,000 loan are approx 1200.00 and this will be very easily covered in the scheme of things as i have an strong income(work overseas).
The family are close by to maintain and look after and my spouse is able to fly back every now and then for deep cleaning once a month etc.
We are wondering if othr people have been in the same situation before? I have done very detailed due diligence and feel its a great opportunity to go for.
Any comments on Holiday letting investmenst or the like??
Thanks for your time.
Chef Don
Hi donchristie
Couple of question and i’ll give my own answers. If there wrong sorry.
first time in vesting in property not a smart move to go into a 900k single property investment, in the most high risk market for me. Holiday rental and have no managment to supervise.
This type of investment looks great medium returns, holiday location.
Will retire into it some day.
Then hell happens no holidayers.
Bank wanting 900k or wanting payments and you have to sell.
10% drop and you’ve lost 100k with legals.
Thats the bad news now the good news.
Take the 900k split into 2 (or more)(if you want resort style investments and I’m not one into them but a couple of people here are) put 450k into one and the other 450k into a permantent investment property.
(I would stagmate your investments to gain experience but if you want, and someone dropping 900k into the market wants risk verse return then do both).
If the holiday drys up you can hold the bank with the other investment.
At worse the bank will sell one property and you have limited your exposure.
The house sounds great but as primary not investment.
As for return go look at newcastle and surrounding areas or sydney.here to help
Gross Relisation has proved a perfect outline of the pros and cons. If you were going to go through with it (though as I said before I seriously suggest you take GRs advice) would be to triple check the vacancy factor as well as the rents you can get.
Also there was no managment fee or maintainance fee in your figuers. If you had a plasma TV and it broke, that would seriously eat into your cashflow for a replacement.
Hellman
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