Wow! So overwhelmed. I am interested in a property selling price $390,000 rental return $500/wk. current growth area.
I have read Steve McKnights books, but there is only so much you can take in until you take the plunge into the market.
It is exciting……. But I’m really nervous at the same time. There is so much going round in my head!!!!!Do I buy???????
Hi Sam,
Do I buy???????
There are probably 101 questions to answer before we would say “Buy” – your question is a bit like saying “My blood pressure is 120 over 75 – am I healthy?” ;)
But I know what you mean about the excitement, so I understand you wanting to burst into print, and onto the property scene too. To help out right now, here are some of the questions I ask you first (and the reasons why I ask, so you can understand where I am coming from)
1. Is this a house or a Unit? (some extra expenses for a Unit that will hit your “bottom line”
2. What is the Median price for that area? (see if you might be paying too much)
3. Are you expecting to spend anything on it once bought? (to get an idea of your investing style – reno, develop, or just hold)
4. Are you expecting the IP to be positive or negative geared? (Learning about you and your goals)
5. Do you have your team together (mortgage broker, solicitor, accountant, etc).
6. What is the vacancy rate of the area in which you are buying? (to ascertain if this is going to be “the buy of the month”)
7. Does this purchase fit nicely with your long-term goals?
8. Do you have finance in place?
9. Have you signed a contract yet?
10. Is this new, OTP, or 2nd hand?
11. Is this in a major city or a regional town?And hey, these are not even in a priority order – so some later questions may be more important than some earlier ones.
Keep your powder dry right now – let’s see what your answers are, and let’s see what other members might ask too. We don’t want you “rushing in where angels fear to tread”,
Benny
Hi Benny! I so appreciate your feedback.
Most of those things I think I have questioned but I think I need to put pen to paper so my answers are clearer to me.
It takes soooo much brain space!1.house
2.$460,000
3.will Reno to add value as a lot can be done to it at minimal cost big impact.
4.this is a hard question. Need properties to do both eventually, but would always look first if fits positively geared figures as they harder to come by.
5.team not quite. Not sure where to find an accountant that is on same wave length in terms of property investing.
However do have an existing accountant.
6. Not sure???? Rental properties are in big demand. Is this what you are asking??
7.yes it fits long term goal.
8.finance in brokers hands now.
9. Not signed anything.
10.second hand
11. Regional
😃Hi Sam,
Thanks for adding more data – here’s what I got from your words – summarised:-You are looking at a second-hand house with potential for a reno in a regional area. Asking $390k, median is $460k. Rentals are in big demand (ttherefore vacancy rate “sounds” low), so that is good. That target property sounds quite good – only the numbers (I think) need a bit more of a look……
My thoughts straight off are these – with a 6.4% return, it might go close to positive geared right off. Of course, with capital and depreciation, that will be assured. This sounds (to me) like a rather high-cost regional house – I hope you are not looking at an area that might be artificially high right now, but might drop in the future (e.g. a mining area). Who are your tenants to be? A family unit with kids? Students at a nearby Uni? DINKS? Mine workers (gasp)?
Some Regional areas might indeed have quite high prices today (e.g. large regional cities – e.g. Ballarat, Dubbo, Townsville – but then, are these really “Regional”?) Can you share the approx. population of the area you are looking at?
Re an accountant – depending on just where you are, you might want an accountant in your area. Share where you live and someone might know of a good one in your city/area.
How did you go with your finance?
Benny
Thanks Benny for your feedback.
Looking for an accountant specific to property investing in the penrith area of Sydney nsw.
Hi Sam,
Check out this thread – maybe someone mentioned in it could be useful to you, even if some distance away…..
https://www.propertyinvesting.com/topic/5019502-need-a-new-accountant-in-sydney/
Benny
You must be logged in to reply to this topic. If you don't have an account, you can register here.
