Based on the figures you’ve given I came up with the following
Gross – 21.7%
Net – 15.1%
Net Cashflow – $4,544 pa
I based this on insurance of $500 and annual maintenance of $500, not having to pay a property manager also helps the bottom line a little.
These figures are very similar to a property I bought in the U.S.A.
GRM – 4.6
DSCR (I/O) – 3.12
DSCR (P&I) – 0.34 if you intend to fully pay down the loan in 2 years you will need to take money out of your own pocket ie.
Net profit of Investment Property – $4,544
Yearly P&I repayments at 5.9% over 2 years – $13,260
Personal contribution. – $8,716 ($167 per week, can you afford that ?)

LVR – 83.3% (bonus of no LMI to pay)

Personally my opinion is that unless you have either or both of
1. Excellent income(s)
2. Very controlled spending habits
That you’re aiming a little high to expect to pay off the loan fully in 2 years. The investment itself (without personal contributions) would take almost 7 years to pay off, however that’s still pretty good.
Without knowing more about the property, the area, the current tenant, and potential tenant pool (ie. Vacancy rate) it certainly sounds quite reasonable.
Hope some of that info helps, any other questions just ask

Hi David,
try out http://www.coannahfinancial.org/
Her name is Tammy Kemp, she is an EA. I found her to be very helpful, knowledgeable and most of all patient with my one million questions.

Regards
Laurie

Your blood supply has stopped flowing and gangrene is setting in.

Futility is continuing to do the same thing and expecting a different result. Your system has led you to a brick wall yet you continue to defend it. Looks like your need to be right is damaging your ability to grow. So what’s the plan now, sit back and wait for all your negatively geared properties to slowly become positive ? How long will that take ?

“You can’t cashflow to leverage the same way as you can’t save to be rich” That’s got to be one of the dumbest things I’ve ever read. you obviously have no understanding of compounding if you think it only applies to capital growth. Compounding simply means that profits are reinvested, something that’s very easy to do with cash, with the added advantage of diversification and adaptation to different market forces that develop. A 10% ROI is the same whether it is derived from cashflow or capital growth, with the exception that cash is realised and can’t be taken away unlike the situation during the GFC when peoples equity disappeared overnight and they were underwater with their mortgages. Their only saving grace was non recourse loans which allowed them to just walk away. We rarely have that protection here, so how would you handle a “margin call” on your loans if the property bubble burst ?
It seems like your strategy is locked in the 1980’s, expecting property to double in price every 7-10 years, times are different now and a lot of the old rules no longer apply.

I’d recommend Pretti at Green Valley, they’re very pro landlord and efficient with inspections etc.

Do you have a risk management strategy?
Putting al your eggs into the one basket can lead to a whole world of pain, I’m sue a lot of investors who put everything into the high yield North Dakota market are feeling a bit queasy right now.

Invest with your head.