Hi everyone, im new to the forum.
Im only 23 but id like to start my portfolio this year. In and around my area of Cairns there is alot of development going on around the city as it is expanding. My personal feeling towards this is that capital gains for the coming few years should be good, as currently we have demand exceeding supply…..however the massive apartment blocks of 100 or more are springing up more and more often…possibly dampening the supply and demand trend.
My question is, would i be better off buying two smaller properties under $100,000 which have the possibility of tenantcy of $200pw or purchase one property to the value of $200,000 which im currently unsure what the rent should stand at. My stance on this is trying to gain a postive cashflow from the property(ies). The two smaller ones are 1 Bedroom units, in the CBD of Cairns and are close to all amenities (Hence the rent price). The sale value is low because of the fact the building and inner walls are breeze block (good for hot weather) but provide a budget home for a couple or single individual.
Does anyone have experience on taking on 2 properties at once for a cheaper price than just buying 1 for much more?
Any advice greatly appriciated.
Thanks,
Dan
Are the 2 smaller ones in the same block?
How much is the BC on both situations 2 v 1 property.
Having 2 gives you the option to sell one if needed and still have an IP.
Hi,
I have bought 7 units instead of 3 and have never regreted.
I have found Cairns market to be better for 1 Bedders.
With the yield you are talking about, I would go for the 2.
C2 wrote:Are the 2 smaller ones in the same block?How much is the BC on both situations 2 v 1 property.
Having 2 gives you the option to sell one if needed and still have an IP.
Thanks for the reply, they arent on the same block, however 1 street apart. Would you agree that units within the same block be better purchases? Sorry not with your lingo yet, so BC and IP arent understood.
bennettvend wrote:Hi,I have bought 7 units instead of 3 and have never regreted.
I have found Cairns market to be better for 1 Bedders.
With the yield you are talking about, I would go for the 2.
I have the same view Bennett. The market for budget 1 bedroom units in my opinion here is large and booming. The fact i can still buy them for under $100,000 is quite amazing however i feel the fact they are a very simple design built with cheaper materials allows for a higher temporary yield, but a cheaper purchase price.
This is exactly what im looking for.
C2 wrote:Are the 2 smaller ones in the same block?As with other investment decisions there are pros and cons – buying into the same block gives you more voting power at body corporate (BC) ie you have a greater interest in the property than someone who only has one unit (this can be good or bad – eg you may be able to block important/necessary expenditure or alternatively be able to push for upgrades etc) conversely if all of your properties are within the same block then you have little diversification ie spreading your risk if your unit block becomes less desireable.
Hi DanziM
I have kept an eye on the Cairns market for cash flow positive property and look at the sub $100k end. There were not that many and were in 3 areas; Manoora, Manunda and Edmonton. The yields were toward the 7-8% level.
Factors to look at – lot of them are >25yrs old so had limited capital depreciation to claim
– body corps are high > $1,000
– rates around $1,800
– the frequency that they are placed on the market
– cost for replacement of furniture items ( as most are fully furnished hence the higher rental )If you have already looked at these, have your finance all set and a plan then go for it . Best to start somewhere and Cairns still has a pretty good future despite what the bloggers put on the Cairns Post.
all the best and good luck from an ex-northern beaches resident
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