Property bought for $170000 repayments $940 monthly IO
18 months later valued at $265000equity obtained $40000
Loan $210000 Repayments $1140 monthly IO up $200Purchase IP for $40000 pls cost $46000 Loan repayment on $6000 $54 a month
Rent for $100 per week $8 management fee rates $75 a month maintanence $41 per month + insurance $16 per monthmonthly return $400 – monthly costs $314 = $86 profit per month
This would not cover the $200 repayments after you have refinanced .
Am i wrong or is their a better strategy?sorry comdom
what’s the question ?
are you asking if a property bought for 40k that rents for 100pw is cash positve then most likely not.westan
Westan,
The question is what is the advantage in accessing your equity from the Ip to buy more Ips if they dont become cash positive.Has anybody else a strategy for this?[
hi comdom
as a general rule i’d never buy something that wasn’t cash positive (unless there was some fantastic twist to the property like a subdivision). i’ve bought a few properties (sold some) over the past 6 yrs and all of them were cash positive.
$40k for 100pw will stuggle to be cash positive, unless you put some of your own money into the deal, say 20%
regards westanThanks westan,
Yes the $40K is the cash deposit, and the price of the house. So total $46K and their would only be 6K owing on the property but even so refinancing in this situation would not benifit you at all as a cash positive investment.
Dom[Thanks westan,
Yes the $40K is the cash deposit, and the price of the house. So total $46K and their would only be 6K owing on the property but even so refinancing in this situation would not benifit you at all as a cash positive investment.
Dom
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