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perryjudd
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January 1, 2008 - 3:10 am
michael, do you think that therefore the outer ring suburbs will start to perform better once the ripple effect continues to move outwards?
perryjudd
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December 22, 2007 - 9:40 pm
thanks for the 2c worth. I retracted the offer before anything was signed. The search will continue…
perryjudd
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December 18, 2007 - 7:14 am
Is that where you have yours breammaster? There's one for sale on realestate.com in that price range still. Might go and check it out. Cheers
perryjudd
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December 18, 2007 - 6:59 am
would it be smart to stick to areas you know when you're just starting out though? I know the brisbane area and don't have time or money to travel around looking at other parts. And due to my lack of experience, wouldn't trust buying something simply by trusting someone else's judgement or doing my research on the internet. Later on maybe but i'd feel more comfortable with my own backyard for the moment. How do others feel about this?
perryjudd
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December 18, 2007 - 2:30 am
L.A Aussie wrote:
The best place to buy an IP is where you can get:
1. good rent returns
2. good cap growth prospects in the mid-long term.
3. good "add-value" factors
4. good tax benefits and depreciation.
5. good location.
6. affordable for you.
This is the basis for a succesful IP.
that's great advice, but it's hard to find no.s 1-5 which also satisfy no.6!
As far as my concerns go, Im just saying that the affordablility of an IP with a rental yield of 3.5-4.5% (which is about where most of then sit in my research in Brisbane and surrounds) is going to be a bit of a stretch, especially initially, so factoring in a decent rent increase would take some of the heat off. The agents (taken with a grain of salt of course) regularly say that this place or that place is underrented and therefore upon settlment you could increase it by a substantial amount to make it more affordable, but it's difficult to know the reality of this. If you look up rents in any given area, they are all pretty low by comparison to the cost of the properties.
perryjudd
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December 17, 2007 - 6:43 am
I have found that when looking at potential yields in these areas, the numbers just don't stack up if you look at current rental prices. Eg 350K property will only get about $300 pw. However I believe that many places are due for large rent increases. It has to catch up eventually right? How do you accurately assess what a place SHOULD realisticly get rather than what it is currently rented for? If this can be factored in then it might be more affordable, but is risky because someone down the road might be happy to accept a lower rent for a similar property.
perryjudd
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December 16, 2007 - 2:55 am
Breammaster wrote:
1)I have a unit in surfers paradise which achieves a rental yield of 8.5% based on a purchase price of the unit, but based on the loan amount its actually 9.5% yield. We bought this apartment this Feb 2007 so its just before the mini boom in gold coast prices. You can still get the same apartment for about 20-30 grand more and the rental yield would be about 7.4% which is still fairly good for todays standards. Answering your question though, i'd say anything 4-5 % is quite exceptable in the current market.
Hi Breammaster. Can you tell me where these units are in surfers with that yield? Are they holiday renals or long term tenanted?
Ive been looking in Brisbane for that kind of thing and those yields don't exist up there.
Cheers
perryjudd
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December 16, 2007 - 1:32 am
Would you include Petrie in that list of areas with good growth potential? Saw a good 4 bdrm place the other day there for $340K. I have heard all those suburbs are good all the way to Caboolture but I'm not sure either as I am looking for an IP, but still vascilating between house out that way or inner city apartment. Rental returns just don't seem to be as high on the north side compared to south. Anyone got any comments on that? Another thing though… don't forget NorthLakes is going to be a massive shopping precinct with DJ's etc going in there, which will service those suburbs on the other side of the Bruce Hwy.
perryjudd
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December 2, 2007 - 9:44 am
thank you all again very much. Jon I will contact you on monday. I am also planning on going to an auction night this week to see what the apartments I have inspected will actually go for. It will help to make up my own mind about whether what I perceive to be a fair price is actually what other people are willing to pay as well.
Obviously it's all about doing your figures, but just which figues to use is what I still need to learn.
Cheers!
perryjudd
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December 1, 2007 - 5:27 am
thanks jon, could you let me know how you arrived at the figure of $14686?
perryjudd
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November 30, 2007 - 10:30 pm
once again thanks for the ongoing comments….
About the corporate rentals… this is what Ive been looking at more recently. The returns are much higher than what you can get in long term, and certainly better than the figues quoted for inner ring suburbs like coorparoo.
Basically on a $330K outlay the rental returns in a furnished corporate rental pool are above $420 per week including management fees. Im not sure if that's guaranteed but on recent data that I can gather the ocupancy rates in these inner city apartments is around 95%.
So if I spend 330K and borrow the lot at say 8% that's $26400 per year interest. Add body corp and rates of say $5000 that's 31400 per year.
Take off 21840 in rental income that leaves $9560 out of my pocket, which is affordable on my meagre full time salary.
I know that if I buy a house and land I would have for fork out considerably more to make up the shortfall between rental income and interest repayments, not to mention the hassle of maintenance or renovations to get the thing rentable.
I guess the big question therefore is what is the difference in capital growth and is that better enough with the house/land to overcome the burden of negative gearing myself to the hilt?
As you all can probably tell, I'm new to this so i would more than welcome comments and criticisms to my thought process!
Cheers peoples!
perryjudd
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November 29, 2007 - 9:27 pm
thanks for your thoughts… I guess the idea with the fully furnished ones is that they go into a corporate rental pool. But you have a point. Do you think that that type of structure would limit your range of possible tenants?
Seeing as the building value goes down over time, therefore capital growth is less than for land, would a smart move be to look at buying in a new building (to claim full depreciation) then sell it after a few years before it starts to get dated? I would ideally rather buy a house and land but for that money you always need to renovate a bit and the discrepancy between rental income and repayments is much bigger…. neither of those aspects really appeal to me. Any more thoughts are much appreciated. Thanks.