Hi all,
Would anyone care to offer their opinions on this property for my education.
It is a purchase price of $200k and renting potential of $260+ per week apparently. I know I would need to see the books and research the market area to prove that but on the outset and my inexperience this looks like a property that, if rented, would provide an income. Could you do your best to highlight things I may of missed. BTW I'm not looking at purchasing, Im simply looking at what is out there. I dont have a deposit just yet and will be buying my own place first anyway.
http://www.realestate.com.au/property-apartment-wa-mandurah-115417347
Many thanks
Paul
Hi Paul
What is the size of the unit?
What are the body corp fees like?
What factors will drive future growth in the area?
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Check:
* Close to schools?
* Shops?
* Public transport?
* Contact council for any public notice proposed developments in the suburb?
Do you live close to this suburb? It would be ideal to drop by one morning around 8:30am or around 5:30pm to get a general feel of the demographic of residents.
I know you mentioned your not in the position to buy, but these will all be factors to take into consideration.
By income do you mean CF+?
$260 rent – PM ($26) – strata ($35) – council rates ($15) – water rates ($15) = $169pw. Figures are guestimations. I don't know WA costs.
Interest on $205,000 (5%) = $197pw. Did not count depreciation either so with that it may be.
So no not CF+ but not everything is. It doesn't mean it's not a good buy. It may be a good CG buy??
I know Mandura boosted significantly a while back due to the introduction of the new freeway and trains to Perth. Is this market saturated? What is the supply and demand in the area?
Are people living that far out of Perth doing so because they want houses or do they want to live in units so they can be close to the beach?
Before asking "Is this a good investment property" first ask yourself "What are my investment goals".
Most investors look at property and fail to analyse it based off their investment goals.
If you want positive cashflow then as Catalyst said it might not be the best bet so it could be a bad investment. If you wanted capital gains and were happy with engative cash flow then it has the potential to be a more suitable investment.
Investment property is just a vehicle to help take us to our ultimate financial destination. First decide what your destination is before deciding on the vehicle used to get there.
(If you chose the vehicle "car" and then decided you wanted to travel to New Zealand my guess is you would have a lot of trouble getting there successfully)
An article I wrote about this exact topic: http://positivecashflowaustralia.com.au/assess-investment-properties-based-financial-goals/
In that article I assess different properties based on my financial goals and may give you some insight
Choose the destination then choose the vehicle.
Ryan McLean | On Property
http://onproperty.com.au
Email MeHi Ryan
Having read your article, I just wanted to highlight the following questions you pose. They really are great questions that will very quickly qualify if an investment is worth looking further into
Quote
Ask yourself the following questions when considering purchasing an investment property
1. Will this move me towards my goal in the short term?
2. Will this move me towards my goal in the long term?
3. Will I still be able to continue investing after buying this property, or will this limit future investments?
4. Is this a level of risk I am comfortable taking?
If the answer is no to any of the above questions think twice before moving forward with the property purchase.
End Quote
Ok, I'll try to answer these questions.
What is the size of the unit?
The advert doesn't say but it looks tiny from the picture
What are the body corp fees like?
I cant see anything about that and its also not a term I am familiar with.
What factors will drive future growth in the area?
I have been in touch with the local council regarding this and as yet they have not got back to me but looking on their website it seems they have plans to increase the overall look of the place in the next 20 years and will continue to carry out the improvement works that they have been doing for the last 10 years. They are to replace an old bridge in town with a better one which will increase traffic flow around the city and are spending money improving the shopping areas and road networks but is this any different to most towns. I have yet to see anything that is significant in driving growth in the near future. I know a lot of people who live in nearby Perth who are amazed at what can be bought in the area and its my belief that as this knowledge spreads over time, with the new rail links and freeway that was recently installed, demand in the area will grow. It may be the case though that the amount of property recently built in the area would ruin any increase in house prices. I am no expert here yet….
* Close to schools? * Shops? * Public transport? Yes to all the above. A good location in the town for access to everything
* Contact council for any public notice proposed developments in the suburb? Have done with no response yet.
By income do you mean CF+? Yes, that's what I mean. I'll address goals and see if I am looking for the right thing.
1. Will this move me towards my goal in the short term?
2. Will this move me towards my goal in the long term?
3. Will I still be able to continue investing after buying this property, or will this limit future investments?
4. Is this a level of risk I am comfortable taking? Yes, I am deliberately looking in the lower end of the market because if I make mistakes and don't get it right the first time, I don't want them to be hugely costly ones. I can afford this place if it was empty and also if the interest rates go up so I have a good buffer to make mistakes. That said I don't want to make any if I can help it. That brings me on to my goals…
Goals. My short, mid and long term goals are as follows.
Short, I want to learn what makes a successful property investment and have taken a step to buy my first real property investment from scratch within one year and have a property tenanted within that time armed with a good team around me. I would like to also find a mentor in this time to help me through the process. When I say my first real property, I should maybe point out that I have one already but although I had turning it into an IP in mind when I bought it, its primary purpose was a home for my new family. That was ten years ago now and we moved away from it to come to Australia. The house is in the UK. It is now tenanted and has been for a year. Its going well so far but I know that I could have done it better. I am looking to purchase another house for my family now we are living here in Oz and then also buy an IP from scratch deliberately, solely as an IP so that's a different view point altogether and I acknowledge this.
Mid. I want to have a portfolio which produces and income for me that throws off passive income so I can pay off my own home at a rapid rate. I want to be able to relax and know that I have achieved at least that level of a $400k house paid off within ten years. I can overpay with my own money but I would like some assistance from property investing, or any other investing for that matter. I'll be happy with having just 5 or so properties giving say $40 per month net as even just that will make a big difference to the mortgage and help me towards my long term goal.
Long. I want to have paid off the house and set up a portfolio that will provide enough passive income that I can call it a day at work and just run my own small company doing what I love which is playing with my boat. I want to go traveling with my wife and be able to go for an infinite time not governed by money. I want a property in Florida as we love the place and I would like to be able to go live there for six month of the year if we decided to. I am happy for this Florida house to be a rental for holiday makers while we are not there but my wife and I are nuts about Disney, Universal and the whole Florida experience, NASA etc so this is a big goal for me. I met someone who was traveling around in a caravan with his wife at aged 50 odd and he said that all he needs is $3000 a month to carry on dong that forever. That sounds great to me, just traveling around the country or even the world meeting people and seeing everything. So in short I would like financial freedom as my long term goal and I put a timeframe of 20 years on this as I am 35 years old now.
So with all of this in mind, how would I be looking to structure my portfolio. Even knowing what I want to achieve doesn't make clear what type of investment would be right for my. I need money to achieve my goals but in what form? Help needed here I think.
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