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xdrew- point taken! i hear you load and clear!
sounds like at this point in my life its not worth the effort. thanks all!
Ok i’ll put a plan together and see what the bank says. Speaking of LMI Jamie, are you able to apply for a discount on the LMI if you get your property revalued and it shows it has gone up in the one year?
Oh thanks for the cognrats….its second time round…so i know what i’ve got myself in for. I guess it may not be that big a deal to the banks considering i get 3 months paid maternity leave from my company and 10 weeks paid from the government….Is the bank really going to ask when i’m going to come back to work after the baby ie 6 weeks, 6 months or 12 months after?
Your all right, I called a property manager from another agency and even to get $450 is not really possible. For what the selling agent quoted (“up to $475”) for, the PM said $400 – $430. ….a lesson learnt from me.
p.s. the property agent was very helpful, happy to have a chat so will be good to bounce these rentals off them from time to time till i make a purchase.
Thanks WomenInPropMelb for the inside from an agents perspective…..good point on the 2 bedder may be better than a 3 bedder.
Is a bit strange for the accountant to say P&I. But if i have a good QS then the accountant doesn’t have to do much does he. Anyway if you guys suggest Interest only, as i’ve heard many times, it makes the figures look much better (of course).
I reason i don’t fully trust my figures is that sometimes, the calculators take property cost with and without stamp duty/reno costs, and or they calculate rental yield either without payments on loan, or as P&I or as I only.
Anyway, yes i have found some excel calculators, and i could put one together myself too if i tried hard enough and could iron out some more questions but anyway…..see below are some figures excel spat out on a unit i’m looking to buy…. how come there is a negative though??? can’t see why i wouldn’t include interest in the calculations, you can’t ignore they are there…. but who wants negative yield….
Gross Rental Yield 4.57%
Net Rental Yield 3.40%
Net Rental Yield (after Interest) -3.79%this was based on purchase price $509000 (including stamp and reno), rent $420 per week, interest payments $2600 per month….
The old lady died, and her children who have power of attorney were the ones selling the property. My solicitor mentioned the word Probate to me and mentioned selling could be an issue, but she didn;t really get into it. Think she decided it wasn't such a big issue. i don't understand it. I'll call the REA tomorrow and see if it is "still on the market" and see what else the dear old fella can say in his attempt to pull the wool over my eyes..at the very least, its entertaining to hear him constantly contradict himself and slip up!
Thanks Catalyst. I've done a few "back of the envelope" sums as per what you outlined as well. I just didn't quite trust myself on it and would like a professional to do it instead…..but don't know which type of professional that is. I thought Interest only was the way to go, but my accountant had told me to pay P&I…..it didn't register with me that i'd only get a deduction from the Ineterest portion (boo). …plus the bank will only do interest only for 5 years and i'm looking for a 10 year investment….excellent point on the offset account, understand it has that same affect on interest. thanks for the advice.
Terryw wrote:Death maybe another!!!A vendor is more likely to die within 90 days then 30 days!
What effect will this have on the sale? any special conditions.
Insanity is another and so is bankruptcy and even divorce – what if the ex mistress lodges a caveat after your exchange?
Death shouldn't be an issue in this instance Terryw. The agent told me last thursday that she just died and the vendor would be happy now to consider up to a 90 day settlement. Then after the auction last saturday (unit was passed in), the agent told be she "just died" now, "she wanted to see the auction through" and advised me it was a good time to make an offer as they were "at a moment of weekness"……so with two deaths already under her belt, i'd safely say there shouldn't be any more!
Thanks for the feedback. I had taken a look at other properties in the area of similar finish and offering and they are renting out for $400pw. The agent that is selling the house says is rental agent thinks it could get 465-$475pw, but i haven't found any evidence yet. Think I'll speak to them direct and ask them to show me examples or justify where they get these figures from.
taIf i can manage to buy at a ‘discount’ AND ‘value add’ (through renovations) targeting a 4.8% yield, would this seem to be a smart enough move or it is still a less than desirable time to buy considering we are in a flat market. I would still be in a negative geared situation….
Nice going Jamie renovating in 4 weeks. Good results.
Where do i go to get the insurance for this period?.
Thanks Derek – wasn’t quite yet research enough to know where we were in the cycle.
Freckle – how else can we make money then !
yes but its in hopes of making $2 extra in the future!
