Hi all
I have been doing some research in preparation for the Masters Seminar and have been looking all weekend in country WA for properties.
I have come across some good houses in towns that are slowly growing and so provide regular rental income. My question is related to how much cash flow should I look for and how much should I consider capital gain.
Two houses I have looked at are in the 75-80K range with a rental of $125-140 pw.Doing the figures it looks something like this
Cost: $75K
Dep: 5K
Mortgage: 70K
Repayments (Int only) $94pw
Rates (council etc) 20pw
Toal weekly cost 114pw
Rental 130pw
Cash flow 16pw
This does not seem a reasonable amount but I would attempt to wrap it and so that would increase the cash flow.So should I buy and then look to wrap and therefore get the required cash flow or keep looking for some cheaper properties. Also I feel that due to the region and some things that are going to happen in the town soon that there would be some reasonable capital gain that would not exist in another town where I may get a slightly cheaper house.
So please,please any thoughts on my situation or any experiences that may enlighten me
CheersThanks
Michael I think I still have a foot in each camp-Cash flow and capital gains. A problem I had in looking for houses was that if I went down in price the rent also went down, the certainty of consistant tenancy was less and the likelihood of maintenance costs increased. Are people out there still finding properties for less than $65k? And should one always have a buyer when purchasing a house for wrapping.
Also Michael the spreadsheet yop talked of. Is that your own invention or is it obtainable somewhere?
Thanks
Darrylunder 65K?
Absolutely, under 30K sometimes. But not in Australia. I haven’t been able to find as good deals in Australia (from a CFP point of view only) as I have in NZ. Where in NZ you ask?
well, practically everywhere that’s not a big city or town. Some regional towns of around 40,000 people have CFP properties, but 20-30 K outside these towns in little towns there are hundreds of super-super CFP properties to be found.
Just start looking at realenz.co.nz, pick any area that’s not a major city and search for properties between 0-50K (and that’s NZ dollars!!!) minimum 2 bedrooms 1 bathroom….you’ll be amazed to find the words ‘over 100 results matched your criteria’…and there are about, ooh, 16 areas like this that will work out for you. there are some rules about international investors which I will try and dig out.cheers-
Minihttp://www.reinz.org.nz/nzinfo.cfm?view=24
all the legal guts of whether you are allowed to invest in NZ as a non-resident or non-citizenhttp://www.lapointe.co.nz/americans.htm
why americans should invest in NZ propertyhttp://www.real-estate-nz.com/properties-in-new-zealand.cfm
you wanna move there? Check Maggie’s site
also
http://www.real-estate-nz.com/buying-from-overseas.cfmcheers-
MiniHi,
Whether or not it is a good deal is a matter of answering the following question:
“Will this property make a higher cashflow (cash on cash) return than leaving my money in the bank?”
If all you do is make money then you’ll have to make money.
Bye,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
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