Forum Replies Created
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
hi citybuyer
like you I am a newbie and had started looking to purchase an IP in different parts of Australia a couple of months ago. So went and read as much as I could, purchased investor magazines and visited forums like this one. The basic outcome was that a pasitive cash flow property is far superior to negative gearing – unless you are on Huge $$$ and need to reduce your tax. It is also a big ask to find a positive geared property unless you are going to put up most of the funds to purchase the IP yourself.
When I started I had a clear idea and used an 8 point basic guide
1] property had to be in lower third of market ( easier to rent, buy and sell later if you have to )
2] gross yield needed to be above 6.5%
3] property had be lees than 20 years old ( capital depreciation )
4] property needed little or no repairs ( less of my money going out )
5] property needed to be relatively close to schools, transport and hospitals ( infrastructure )
6] are property in need to have more than one main income driver ( economic diversity )
7] rates/body corp fees levels ( helps with ITWV from ATO )
8] what is the long term growth trend for the area the property is in. ( usually can find on Domain or realestate.com )A lot of the posts I have read here have been good – I even agree with a some of the things that hbbehrendorff has posted ( but would not be keen to use cash to buy into commodities shares on the promise of an ongoing income stream ).
Seeing a broker is a good option and always be prepared to revise your strategy. It may even mean sitting on sidelines for a couple of months – pretty much what I am going to be doing til mid Jan/Feb when things settle down a bit.
good luck
