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  • Profile photo of MilkmanMilkman
    Member
    @milkman
    Join Date: 2003
    Post Count: 22
    September 18, 2003 - 3:39 am

    [:D] Thanx Guys/Girls, I will put that into my search criteria. I just didn’t want to depend on the agents estimation as R2 said that they are the ones trying to get you to buy the property.

    Thanx again.

    Profile photo of MilkmanMilkman
    Member
    @milkman
    Join Date: 2003
    Post Count: 22
    September 17, 2003 - 4:08 am

    R2,

    For a start the Bank will only lend you about 80% of the value of the property, so you must come up with the additional 20% to 25% yourself via additional finance or cash.

    If the costs of the property (interest, rates, insurance etc)are greater than the payment you receive (rent) then you can only claim the negative difference from the ATO.

    Steve uses the “Cash on Cash return” also to check the profitability of an investment, I don’t have his book with me at the moment but I think that you divide the perceived income received by the initial “Cash down” (Deposit plus closing costs) and anything above 20% is not bad.

    To work out the NET return on the property you minus costs (Interest, rates, insurance, repairs etc (budget)) from the rental income.

    Someone may refute what I have told you but I just read the book (finished yesterday)and this is what I believe.

    I hope that it answered some of your questions……..

    Steve.

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