is this a good deal

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tdc
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@tdc
Join Date: 2006
Post Count: 1
June 8, 2006 - 5:00 am
I am looking at a property at the moment that is priced at $125 K. It is a studio appartment in the city. It brings in approx $10750 in rent a year showing a yield of around 8%. there is a long tennant lease on the property. is this a good deal for a first time investor.please help
Stuart Milne
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@stuart-milne
Join Date: 2006
Post Count: 196
June 8, 2006 - 10:46 am
What are the outlays? management fees, body corporate etc? Insurances? Rates?
I would suggest against it personally but it may be the right thing for you. It is hard to know without knowing your personal position…
Stuart Milne
Non-Conforming Specialist
READY Mortgages
http://www.readymortgages.com.au
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crusher
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@crusher
Join Date: 2002
Post Count: 186
June 8, 2006 - 2:32 pm
Hi TDC,
Studios can be hard to get a loan for because of their small floor space. Anything under 50m sq is usually an issue for the lender. They are more difficult to sell for the same reason. They also tend not to appreciate in value as much as the other standard types of properties. There is usually not that much of a depreciation benefit either.
As Stuart mentioned, make sure you check out all of the expenses as well and work out what the Nett yield is not just the Gross yield.
Regards
Todd Burns
http://www.freepropertyhelp.com.au
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
June 9, 2006 - 2:25 am
These units are not in broadway are they? They have been $125,000 for about 10 years now!!
Terryw
Discover Home Loans
Parramatta
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