Forum Replies Created
Hi Glenetti,
I’m renting a cottage by the night too[biggrin] in
Wellington, NZ.
It happened by default. Four years ago two neighbouring sections to my own home (one with an old vintage 1br cottage on it) came up for sale. We were worried that someone would put on two big mcmansions and spoil our outlook. My husband said if I did buy it I would have to make it pay its way. Always like a challenge[lmao]We ended up buying both sections (two quarter acres), and rented the cottage for $140 a week for a while which didn’t cut the mustard. So like you we furnished it up right down to the towels, cute as, put it on the web and rented it by the night to tourists. It took a year to get going, but now we have it rented at about $500 pw for 65% of the year and its growing. Its expanding so much every year, I now just put the nightly rate up every year and keep it at about 65% occupancy. More money, less wear and tear. My visitors have been great and they mostly leave it tidy. Only breakages have been the odd wine glass or cup and even then they usually leave cash to cover it. We are getting return business now, and during summer I’m constantly turning people away. I do all the cleaning and gardens and website design myself, and I’m home with my kids so it works out just fine, and theres always somewhere to stick the friends & rellies.
The other section we got is looking ripe for another cottage as the business grows.
I know I could fill a second one for 26 weeks of the year, but the winters get a bit thin.
I have never put it with an agent, it has been marketed by website solely so I have some leeway to expand my marketing.
I wouldn’t recommend this type of renting for any old property, but if you have a property with that “special” something or magic setting it can be very lucrative and cover the extra cost of holding an IP in a prime area and staying CF+.Huh[baaa]
Who is Henry Kay?
I’m with Qwerty, I’ve always bought in the slumps. I’ve cashed out recently at what I hope is the top of the cycle and eliminated debt and will await new opportunities in the coming years.
I’ve done my time through three property cycles and paid the 15%+ mortgage rates over the years, but always CF+. It can work in your favour when your mortgage rate is lower than the inflation rate.Originally posted by kay henry:Bionic,
Inflation is lower than it has been for 4 years (since the inception of the GST, where inflation, as measured by CPI came in at 6%!!). The annual inflation rate came in this week at 2%. That is in the bottom range of the Reserve Bank’s target of 2-3% inflation.
Where does your prediction of rampaging inflation come from?
kay henry
From what I understand the total inflation is low (due to drops in import prices because of a strong Aus$, BUT domestic inflation is a lot higher, over 4%).
The Aus$ has just sunk against the US$, so surely that means there will be inflation from both domestic source and external sources in the coming months.
ie: Inflation will rise from here on, unless AUS$ strengthens.
China has hinted that their rates are going up to slow there booming economy, the US Fed will have no choice but to put up cash rates soon.
It all flows down.Its all up from here IMHO.
I’d be fixing my rate if I still had a mortgage
I reckon you can have it all, if you start young.
I bought my first IP when I was 19 (and living at home – thanks Mum[biggrin]). I had saved for three years while a lot of my mates were blowing their wages. I didn’t go without, but I saved religiously and managed a 30% deposit on an old villa converted to two flats for $30,000 (1981).
Did some renovating and sprucing up and rented for $150.With the flats positive geared, I was free to leave for overseas and have something to come back to when I was ready. I travelled for four years doing all sorts of jobs in lots of different countries, and generally bumming around.
Twenty years down the track, and I have three freehold properties, and a big enough income to be at home with my kids fulltime.
Its not quite retirement, but it was the longterm plan.[specool]
When my last one goes to school later this year I’m not sure if I’ll work or not, but its nice to have the choice.A few years of focus when your are still young and unencumbered can set you up for life.
Hi I’m a newbie. Interesting thread &
good post Superted. I’m an old timer in PI, and have never been to a property seminar or read a property magazine or book[biggrin].
I’m quite in awe of the exuberance in PI over the last few years and that has caused me to rethink my long term strategies.The next boom (this one is definitely over[baaa])
could be a long time coming. The last cycle dragged on for years, and it will be a long haul for some who have only just got onto the bandwagon.Inflation is low compared to the late 70’s/early 80’s, so I hope people are accounting for this in their sums. Not much chance of your repayments inflating away for awhile.
My aim for the moment is to eliminate debt, eg: sell off the stragglers and freehold the primos, and have cash ready for future opportunities a couple of years down the track, when the dust settles from those charging herds.
