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The cafe comes complete with staff and manager, and I would just be a silent owner, accepting the profit as it comes in (well thats how I envisage it, probably completely different). Its the business I am looking at. I dont believe it is leasehold, I believe its freehold, and if I have got this correct, the shop and everything in it. I am looking at this as just an extra source of income to enable me to pay off PPOR or more IP's. Basically it was $100k +/- net profit, which I reckon could dump strait on PPOR loan.
Does all this sound feasible? Obviously due dilligence must be done, and the books to be scrutinised before anything happens but for a small outlay(as far as investing goes) I think this is a bargain.
Any thoughts??
Hi Leah,
This would be a nice little money spinner i think. Rent would only have to be more than about $160 a week for it to be putting money strait into your pocket. I think I would be tempted to keep buying from your boss at below cost. They obviously do there research when deciding where to build, so I would imagine there would be no problems in getting tennants too. Having said that, all your eggs in one basket…..not a good idea. Maybe a house next?????
Another option would depend on the value of your unit now. If it has amassed capital growth already, you can use the equity towards your next IP. Maybe you could change your loan from interest only to P&I and use the excess rent to pay the unit off completely.
Or, if you were to get another unit off the plan, you can always see what the interest in them is like once built. If the demand is high, raise the price and sell for a quick profit. If the rental edmand is high, rent it out. Opportunities are endless.
hope this helps
Thomas, I wish I had my head screwed on when I was your age. I lived life to the max instead of moderation and planning for the future. I believe you are doing the right thing. And as said previously, knowledge is everything. Subscribe to property magazines, read websites, download e-books, get yourself along to a seminar or two, all of which I did aswell, and I am now looking for my 2nd Investment property. I am trying to instill to my kids about property, even though they are a little young yet, but being money wise is what its all about. OPM – other peoples money, (you have the loan / debt, they pay it off in rent).
Good luck and hope it all goes well for you
I have looked at that option but I cant help but think paying rent is wasting money. It sort of defeats the purpose of having IP's. I pay someone else's IP while someone pays mine. I may end up doing that in the long run anyway, begrudgingly i must say, but at least it would only be for a short term untill we found something we like.
If I was to do that, how would I be able to borrow again seeing though the banks probably wont lend me at the moment, or will I just have to knuckle down and increase equity by reducing loans? I have read about "no money down" finance but I dont understand how that can be!
