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Hi Trooper,
Is this positive cashflow @ 6.5% gross returns? Putting depreciation aside for the moment. Have you factored all your costings in. What is the asking price $230,000-240,000?Expenses:
1. Body corp contributions
2. Council rates
3. Water & sewerage access charges (if not charged to the tenant)
4 Management & letting fees (8.5% of gross rent + letting fees standard 1st weeks rent)
5. Landlord insurance
6. Home insurance
7. Repayments (Int Only)Hi Simone,
It sounds like you have been contemplating this purchase for a while now and have not made an offer or any progress.
Consider the following:
– Are there many properties for sale that you can somewhat compare or under offer in this price range.
– Have they been sitting for sale for a long time (I can check this for you)
– What is your budget (high and low) – eg. $280-370k
– Is your absolute priority this one, as it needs work. Will you really want to purchase this property knowing the immediate or short term work required. If so, thats greatThe rest it sounds as if you have done your due-deligence. Remember you can only do due-diligence on the past. Projections, forecast etc are really just educated opinions. If this is long term for you 3+ years, which it should be, the marketplace looks after itself. What matters is that you can comfortably service this property if unforeseen circumstances arise.
eg. rental return (is their a strong rental market).Remember, you have to be in it to win it. As a serious buyer you must be ready to pounce at a moments notice.
– Have your finances sorted (pre-approved as a minimum)
– Know your terms and conditions (finance, b & P, settlement time frame)
– Know how to negotiatie (or know someone who does)
– Remember it is not only the price that is negotiable, terms and conditions are as well<moderator: delete advertising> At the end of the day, if this property does not meet your criteria in terms of needs, price, figures etc. do not ponder. Move onto the next one as this really is a buyers market and an exceptional opportunity to build wealth.
Hi Trooper,
A couple simple key points to consider.1. Is the population stable (increasing)
2. % rental market compared to owners (can find all this free info on domain.com.au)
3. Is it low risk- based on presumed figures it seems if market variations were evident you would certainly have a buffer
4. If the one next door is currently rented @ $290 consider making an offer where the property must be leased before settlement.There are always predictions of capital growth in particular areas. Be aware of the instability and buyer sentiment in today’s marketplace and make sound investments were the yield or cash flow coming through is positive or very close to.
