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Thanks Zimby, definitely a lot to consider. If this was something I was going to go for, I would only offer the lowest amount $550k or perhaps even a lower offer , and if someone offers more, so be it.
So having looked at around 15 properties in my favoring suburbs, there is one which I looked at today which really stood out. On paper it sounds really good so at the opening today there was a lot of interest. And I was just interested in some opinions..
First, it is a lot more than what I was originally looking at spending. The asking price is $550k-595k which would be close to the maximum I would be allowed to get on a loan. And the home loan repayments for a $500k loan will be around $800/week… ouch!
It is a 2008 property on the nicest street of land in the suburb (not a main road). In the neighboring suburb, about 8-10 minute walk, they are building a new urban village. This area is doing major developments everywhere with really nice new townhouses.
The house has 5 bedrooms, but 1 should be left more of a study area, and currently the bedrooms in the house are being individually leased to students. Three smaller bedrooms are being rented at $150/week and the much larger bedroom (big bedroom, retreat, ensuite) at $300 week. This means a current return of $750. The other bedroom/study could potential be rented at another $150 for a return of $900 week. The house is quite big (220sqm), but that would still be a lot of people.
How difficult would it be trying to keep up in individually renting each room? Just renting the whole house by itself would be much easier, but I would expect the rate to be much lower.
An idea of other prices around the area, new 3 bedroom townhouses are being asked for around 500k at a 450k per week rent.
Sorry for delay in responding. I've been self employed for 7 years so I can provide my tax returns. Last 2 years have been fairly good, so my income average will be good enough to get a decent loan.
So the best way for investment, is long term loan at lowest interes as possible.
I may actually have the opportunity to purchase a small 3 bedroom city appartment place for $275k which is already tenated at $535 per week. Taking into consideration the high council rates, this still sounds pretty good doesnt it?
I would be very cautious in buying properly over the next 6 months.
