My husband and I are considering starting a property portfolio and have calculated that we have about $40k in equity, which would mean a purchase price (keeping LVR to 80%) of about $210k (plus $10k in buy costs). We are wondering if there is anything out there that we could afford right now to start our portfilio off (ie property for about $210k), or are we better to wait another year until we have paid down our house some more, and hence have a bit more equity in it to play with? We are looking at positive cash flow property only. Any comments or suggestions are MOST welcome.
here is a place i found at grenfell western nsw ,,,, west of cowra ,,,Aston & Joyce Pty Ltd [[email protected]] GREAT FAMILY HOME * Good position in Dagmar Street *Large 2023m2 fully fenced block. * Beautifully renovated large family home. * Three Bedrooms with built ins. * Three sleep-outs. * New kitchen with electric stove & dishwasher. * New bathroom with bath & shower. * Large lounge room with wood heating * 2 x R/C split system A/C. * Floating floors thru kitchen, dining & hall. * Freshly painted throughout * Large back verandah. * Outside toilet, carport & garden shed. ASKING PRICE : $180,000
p.s sorry i couldnt get pics to load
lisamills wrote:My husband and I are considering starting a property portfolio and have calculated that we have about $40k in equity, which would mean a purchase price (keeping LVR to 80%) of about $210k (plus $10k in buy costs). We are wondering if there is anything out there that we could afford right now to start our portfilio off (ie property for about $210k), or are we better to wait another year until we have paid down our house some more, and hence have a bit more equity in it to play with? We are looking at positive cash flow property only. Any comments or suggestions are MOST welcome.If you have $40K equity the bank will lend you a max of 80% of that so $32K. Take out $10K buy costs that leaves $22K. Or have I got that wrong and you will have $40K + $10K buy costs available to spend?
What type of properties do you want to buy? I know CF+ but how will you get this? Buying regional? Buying and renovating?
Catalyst wrote:lisamills wrote:My husband and I are considering starting a property portfolio and have calculated that we have about $40k in equity, which would mean a purchase price (keeping LVR to 80%) of about $210k (plus $10k in buy costs). We are wondering if there is anything out there that we could afford right now to start our portfilio off (ie property for about $210k), or are we better to wait another year until we have paid down our house some more, and hence have a bit more equity in it to play with? We are looking at positive cash flow property only. Any comments or suggestions are MOST welcome.If you have $40K equity the bank will lend you a max of 80% of that so $32K. Take out $10K buy costs that leaves $22K. Or have I got that wrong and you will have $40K + $10K buy costs available to spend?
What type of properties do you want to buy? I know CF+ but how will you get this? Buying regional? Buying and renovating?
I thought I had calcs right??? We have a home loan of $450k and a house worth approx $610k…how would you work out what loan I would obtain (without having to incurr mortgage insurance?)…We are looking to buy post 1985 brick, freestanding villa or unit or house, regional area with good growth. Not renovating if can avoid it. What is CF+ ?
Thanks for your interest.If you house is worth $610 then the bank will most likely let you borrow to $488 (80%) so you could draw $38K. Don't forget yoy need purchasing costs as well as the deposit.
Then if you borrowed 80% on the next property there would be no mortgage insurance.
CF+ means Cash Flow positive. Do you know of areas where you can achieve this? "We are looking to buy post 1985 brick, freestanding villa or unit or house, regional area with good growth." Good luck. It's not easy finding properties with great yield (to make it CF+) plus that have good growth. Not to say it can't be done. Usually properties that are under market value may need some reno's to bring the value up. Then that makes them CF+ because you bought cheap. With interest rates up at the moment you'd have to be getting amazing yield to make it pay for itself.
Try these…
http://www.realestate.com.au/property-apartment-qld-sippy+downs-106666048
Yes, I know they're student accommodation. Yes, I know not all banks like them. Yes, I know I'm biased because I own one AND YES I WANT TO BUY MORE!
Andy,
What makes them so good?
I have heard some of the bad points about student accommodation before.. poor capitol growth, and that they are only rented for so much of the year, for example.
But what are the up sides, from your experience?
Lisa,
Also have a look around for properties that may be worth more than that, but which you may be able to negotiate down to that price… i.e. mortgagee sale, deceased estate, anyone in a hurry to sell, house has been on the market a long time, or you could try plain old 'lowballing'.
This way you get a house within your budget, worth substantially more than what you're paying for it.
Hey Grimnar,
Let me quickly share my viewpoints on them…
Poor capital growth; very true, even negative growth! But that's great when someone paid $235k for that unit 5-7yrs ago and I just bought it from them for $188k! Essentially, someone else can wear that expensive lesson and I'll happily take it off their hands.
Rented part of the year; again very true. This complex used to only rent for 40wks of the year so think of having a constant 23% vacancy rate! That's fine as long as you budget for it and calculate your returns on an annual basis and not some inflated weekly figure. Also, the managers here are in the process of changing from 40wks a year to 48wks. Not many other places have their rental returns jumped 20% although this is a once off gain.
Lastly, the banks don't like them. I mean they really don't like them! Be prepared to shop around to find someone willing to take them as security.
Ok, now the upside. Stupidly high cashflow. Low entry price-point. Can be fantastically hands off if you have a good manager (same as anywhere). Lots of similar properties to compare against so lots of fun running around making insanely low offers and seeing where they go. Well that's just in my not-so-humble opinion.
Anyway, not something to dominate a property portfolio but can be a nice balance to those -ve cashflow high growth properties elsewhere.
Hope that helps,
Andywhat about 3 bedroom houses in Sydney – whalan, Mt Druit. High rental yields too
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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