Hi,
The town that we are looking to invest in has a large amount of houses in the $20-30,000 range. Our leads are mainly pensioners who are paying rent on average of $110 per week. Even working as high as 3% interest margin and 30% margin on the price it only returns a $20-30 a week spread. With the FHOG used as a deposit we will be left with no or very little money in the deal. Is all the work associated with a wrap worth a return of $20-30 per week?
Does anyone have a floor price for there purchases? Or should we take the $20-30 per week and be grateful? Or even perhaps buy and hold. Any comments would be appreciated!!
Thanks.
Carolynne.[
]Carolynne
1) It is your game, you make the rules [
]2) Having said that, think about this:
$30/wk * 52 = $1,560 / yr per house
If you have 10 you now have a passive pre-tax income of $15,600 / annum.
If you have 20 you now have a passive pre-tax income of $31,200 / annum.And if, as you say, you are almost no money down to establish them. So, that would mean that you are capable of setting up a passive income stream of $30,000 plus for almost nothing.
Mmmmmm sounds good to me <grin>
3) This is really the principle behind wrapping. You make at least a small profit on each deal that will repeat for up to 25 years. if you do your sums right, even if your clients buy you out early you will still make a good return.
Howzat ???
Bruce
ps: keep the questions coming !! [
]Hi Carolynne,
I have had a look at wrapping in these towns and came across one possible snag. I could only get finance with a 50% deposit. This may not be the case here but may be worth looking into. Large deposits and purchase costs can mess the numbers up a bit.
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