Forum Replies Created
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QLD 007, when you refer to QLD regional towns, I take it that you are referring to Nth QLD (Cairns, Townsville, etc.)? As a local, what trends have you observed (particularly, affordability, capital gains, vacancy rates?)Hi jester, maybe i can be some help,
i will set out an example for you below of a +ve cash flow property.
eg. Property $50000 at 6% at 30 years = $74.94 a week now lets say $10 to be added to that to cover for insurance and mortgage protection.
New Figure $84.94 a week minimum to cover expenses.
Property has a current rental for $120 a week, profit in hand a week would be $34.06 a week a yeild return weekly would be 28%
To work out your vanancy, i will show you a quick caculation.
Annually the bank would like $84.94 a week x 52 would equal. $4416.88, using how much rent you expect a week divide $4416.88 by $120 (remember $120 as rent represents 1 week)
Answer equals = 36 weeks a year the property would have to be rented out to cover the loan for 1 year,
In theory this would allow the property to stay vacant for 16 weeks or 4 months a year and it will just cover cost still, and yet still if it only did cover cost you can still claim the interest and maximise your tax.
Another win win situation
Rates, ask the real esate agent, properties furhter out north that i have purchased have a high coucncil rate approximately $1200 – $1400 a year, but everywhere is different.
thanks terryw, i will look at that as soon as i can, i spoke to the bank and the real estate agent, what i thought up was i could get to organise subject to finance and allow a 3 week period for that, if the vendor agrees, well im in luck but not i guess ill have to keep trying.
i will disagree, many of the +ve cash flow properties i have purchased, i have been able to use 100% equity and only have had to pay for was legals and stamp duty.
Most the properties i have purchased at 100% equity that are +ve cash flow are between the 25% – 51% yeild return a week or annual, 13% is good but take into consideration does that also cover your council rates and land tax, you dont want to pay for that do you, keep lookin you will find properties that bring in a higher yield return.
Hey guys, i notice theres alot of people here my age.
Hi to all, let me introduce my self, 20 and still in uni and male too…lol
alright here is my advice.
i bought my first property at the begin of this year and many more, the way i did it was i went to the bank and i asked them straight up how much i could borrow and how much deposit i would need minimum, talk to my mums solicitor i was quickly able to work out how much i needed, but here is the inside story. To kick start my PI i have to borrow approximately $15,000 cash, i worked every single night(i do night work) and eventually paid off my debt, but borrowin that $15,000 and havin my mum be my guarantor on my first few properties, i covered costs and debts and finally did make it.
If you really believe you can do it, talk to your bank and find out. though you do have to have a workin history, thats the only down fall thing.
Hey Pinit2000, thanks for helping and explain what -ve gearing is, i wish i knew you about 7 months ago, im also just a youngie on here, im 20 years old and i own quite a few investment properties, but when i was tryin to seek advise like Chtulu, no body would offer it or help me out, banks refused me cause of my young age and all and i remember one time the bank sayin to me “come back when your a little older”
well, to cut my story short, i had to read up about books ask my mother who is an accountant and she explained to me but very little but with persistence i was able to teach my self about property investing and was eventually able to find a bank that helped me and know i play the property game, but to get were i am today has taken alot of persistence and knock backs.
Its much quicker and easier to create the excel formula than to download one, i have created one that also caculates the stampduty on investment properties, you will find it very hard to find software out there, that can caculate this for you and many excel programs are on american or canadian system of workin out how interest rates are caculated, you will notice there is some difference.
also creatin one your self will help you and further knowledge you about interest rates and you will be able to quickly caculate a property with havin your excel spreadsheet infront of you.
what i have learnt is take your time and dont rusht things, if you rush things you might miss sumthing always take your time and always check twice, this way you can elimanate a minor risk or an obvious risk that you might not have seen the first time.
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I have found a property that I would offer $85,000 for that has a tenant paying $145 pw.Can someone tell me if this is a good deal or not?
The house is neat and low maintenace.Like you Andrew I am not sure when to step outside of the 11 second rule and to what extent.
Here to help. Cherly first up i caculated this for you.
$85000 at 6% interest over 30 years would equal a weekly repayment of $127.60
so in hand you would have $17.40 a week more, but do remember you would have to add your mortgage protection and insurance to this so minus approximately $10 for that everyweek,
in actually fact you would be left $7.40 in hand a week.
From my personal experience i would call this a neutral geared property – meaning it just pays it self off.
but lets say if interest rates were to rise to 7 percent which i believe they are forecast to at the end of this year and early next year.
This would be how much in hand for you.
$85000 at 7% interest at 30 years = $141.25 a week loan repayment, so in hand you would recieve only $3.75 but you would definitly have to pay out of pocket expense for mortgage and insurance protection, though these are claimable on tax.
Thats my 2 cents
Hey Dinoweb, heres a suggestion, anything i purchase say books stationery for uni and for my IP businees i claim it all on my tax, steves book can be claimed on tax if you want.
Claim it under stationery and also doing this you can maximise your tax return.
for me personally i want to be financially free by the age of 26 but for retirement im just lookin at goin semi retired, the reason being property investin to me is almost like a full time job and still you have to do paper work, tax returns and keep a watchful eye over your properties and investment for any problems or situations that might occur later or sooner that you expect.
that still to long, it may only be 3 weeks a way but the property im lookin at has a tenant there on a 2 year least and has a remaining 1 year and 8 months still, also the property is comin at only $55,000.00 and postive cash flow, is there any way i can purchase this property with out havin to wait for my equity?
hey arty thats a good age to aim, but im sure your not to far from retirement.
good luck!
hey arty thats a good age to aim, but im sure your not to far from retirement.
good luck!
hey arty thats a good age to aim, but im sure your not to far from retirement.
good luck!
All comments welcome, thanks
count me in too!
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Ali
I believe that contracts can be amended if both sides are agreeable.
Cheers
MelSpeak to your vendor and find out. Normal Contracts can be amended and can also be subjected if you feel the need to, as long as both parties agree. As for what was said earlier, speak to your solicitor.
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sheez…it is a long way to go once you get your silver to trade-up again!
BUMP
Ideally i am against what most people would say on this board, first up i would say you are better to purchase a negative geared property as your first property investment and maximise your tax return and capital gain.
The reason why i believe this is that lets say for example, you buy a property at $100,000.00 at 6% for 30 years that would equal. A payment of $149.88 a week, now lets say the property rents for $130 a week you are at a lost of $20 a week, as far as i can see, you obviously can afford this. Now making sure and being positive that this property gains a capital gain of $50,000 more after 3 months for example a property boom, you have already got access to $50,000.00 in equity. You can then either use your equity to fund your next property which can be positive geared, also this would allow to sell the property the followin year with captial gain and quicker money made. This in theory you would be able to purchase more positive cashflow properties with in a year cause of the extra funding and equity you have,
Destiny Solutions – Finsoft 5, excellent software, can caculate all the nitty gritty, and can give stamp duty prices and all relative caculations to most kinds of purchases.
