Hi, I have had success as have our clients with both three bedroom and two bedroom properties.  Personally and from all the years of experience I have in property investing it is more important to look at the figures and the key indicators to determine if a property will be a viable investment. 

Consider these two recent examples from purchases our clients have had in the past month.  One of our clients purchased  a brand new townhouse for $279K with a rental return of $350 per week.  Another client purchased a two bedroom duplex pair for under $500K with a rental return of just over 6%.  This deal will make them an extra $90K in equity after they finish doing the strata and other changes to the property we have discussed with them. 

As a rule pay more attention to the purchase price, the returns and the opportunity the property presents as well as the key indicators of the area to ensure that you are making a wise purchase. 

Hi Bek,

If you believe your property price is fair market value and the rent of $760 per week is correct market value as well then you might find a private buyer on here.  I also would be happy to look at the deal to see if it matches what one of our investors may consider.
Regards
Paul.

Hi Rich,  thats a good question.

There are two types of property when speaking about cashflow: one is positive cash-flow and the other is positively geared.  + geared allows for all the benefits of deductions etc so the property is positive on paper at the end of the financial year.  You need to factor in all your personal circumstances to determine if a property is going to be ultimiately positive for you and make sure you don't miss any of the benefits you are entitled to.

All my properties are interst only loans and that seems to be the most common loan structure for our clients too, the benefit of interest only is that it allows you to manage your cashflow however it dosent mean you can't reduce the principle from the loan as well if you are in a position to do so.  If you manage your cash-flow so the interest only payments are met and any surplus comes off your PPR or any other personal debts it will give you the most effective tax leverage as well, of course you need to check all this through a good accountant to make sure that is the best situation for you. 

When you look for the right property, make sure you look at the key indicators to ensure you are getting the best bang for your buck and that it will fit in with your ultimate long term strategy.   Don't go in blind and hope that it all works out, investors who do that are the ones who need the most help being bailed out of the mess they created, always start with the end in mind. 

Remember that you can navigate your way through the property maze on your own but you don't have to, research the best method to help you get to your goal in the quickest possible time frame, and then go full steam ahead, the results are worth it.  There may be more than one strategy that will help you get to your your goal, consider all of them when planning your next move.

Kind regards
Paul.

  LOL

Hi again,

Depending on the type of the property you want, you almost have enough to get started with your first property.  A recent real life example is if you buy a property for $95K renting for $180 per week = 9.8% return 

If you only borrow 80% your deposit is $19,000 allow 6% of the purchase price for your costs $5,700

I hope this is a good general guide that you can apply to other properties you assess.

Hi All,
Great Post Adam,
Its interesting to read such a mixture of positive and negative opinions on the ability to buy cashflow positive properties.  In the last two weeks we have secured returns for properties ranging from 8%-10% as a gross return before rent adjustments or value adding.
A key point to target these properties is to have your finance in place and have a relationship with a lender who can support you borrowing to buy these type of properties.  Although investors love them you need to be in a situation that the bank will be happy to lend for you to buy them, as they are very popular a lender who drags the chain can cost you a great opportunity. 

The most important thing is to not have your identity tied up in your money, enjoy your families, friends and live to make a positive contribution to those around you.  The investors who I love speaking to and spending time with are those who are having a go and being smart about wanting to achieve some security but who have a healthy perspective about the priority it has in their life.  If you have a crack at it and something goes wrong, you can usually pick yourself up and have another go. Once your thinking is right you can do anything. If something goes wrong and you fall into a depressed heap and can not be motivated to get up then you placed too much value in the identity of the materialism and not in the human element of the people who you have surrounded your life with.  At the end of the day that is how you determine how wealthy you are.
Cheers
Paul.

<No trawling for clients permitted> Derek