All Topics / The Treasure Chest / newbie wants to invest 300k house or 2*150 townhou

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  • Profile photo of charkchark
    Participant
    @chark
    Join Date: 2002
    Post Count: 7
    June 13, 2003 - 5:02 am

    all,

    haven’t invest in property before, just thinking of investing in Queensland. As it is more affordable than Sydney.

    Just few questions, I know I can get bank to approve 300k loans. should I be investing in 300k house or 2*150 townHouses. Which one will give me a better grow from the past experience?

    what do you think of the way market is going ? would it slow down or will it crash?

    thanks in advance

    Profile photo of hilaryhilary
    Member
    @hilary
    Join Date: 2002
    Post Count: 146
    June 13, 2003 - 8:57 am

    If you want income, then go for the 2 townhouses. If you want capital gain, then the house will get more. If you can get into a great area, you might get both, but since there is more land attached to a house, then that is where the gains happen.
    What area are you looking at?

    Profile photo of CocopopsCocopops
    Participant
    @cocopops
    Join Date: 2003
    Post Count: 10
    June 13, 2003 - 9:22 am

    Given this is your first investment property Im assuming you are wanting cash flow, may I suggest that 2 townhouses will spread your risk. My neice recently purchased a beautiful townhouse on a decent size block of land for $150K in Labradoor Queensland.

    Good luck!!!!

    Profile photo of hilaryhilary
    Member
    @hilary
    Join Date: 2002
    Post Count: 146
    June 13, 2003 - 9:31 am

    good point about the risk[;)] – less likely that 2 are vacant together – one house vacant leaves a big zero income.[:(]

    Profile photo of charkchark
    Participant
    @chark
    Join Date: 2002
    Post Count: 7
    June 16, 2003 - 12:14 am

    thanks for the replied, I am thinking of springwood in Queensland. Rental return is not that great, say $160,000 for the townhouse and get $190 per week.

    any body know about the Salibury suburb, the town house goes for $190000, and rental return of 210 per week, will this give me a better grow than the Springwood?

    Reason I want to buy, is get some tax back, and it is affordable.

    Chark

    Profile photo of sushi03sushi03
    Member
    @sushi03
    Join Date: 2003
    Post Count: 33
    June 16, 2003 - 3:25 am

    Hi Chark,

    I am basically a newbie myself.

    I think you need to establish exacly what your goals are. Judging by the numbers you gave for the 2 houses, and assuning you have a 20% deposit for each these are some rough calculations for you.
    Springwood
    Purchase price: $160000
    Deposit: – $32000
    Stamp duty : + $4300
    Legals:approx: + $500
    Mortgage fees: + $500
    Balance: $133000
    $133300 P/I loan @ 6% over 25 years works out to be $858/month
    Rental income $190/week works out to be $823 /month

    Leaving you $35 a week out of pocket

    This does not include Rates, insurance,management fees, Etc

    Salisbury
    Purchase price: $190000
    Deposit: -$ 38000
    Stamp Duty: +$ 5275
    Legals approx: +$ 500
    Motgage fees : +$ 500
    Balace: $158275

    $158275 P/I loan @6% over 25years works out to be $1020/month

    Rental income of $210/week works out to be $910/month

    Leaving you with $110 out of pocket each week.

    This figure doesnt include the other outgoings as i have stated above.

    What you might have to think about is that the tax saving really worth you being $150 /week out of pocket before all the other charges.
    Anyone please correct me if i am wrong as i am trying to get the hang of all this myself.

    Basically Chark all i am saying is that you have to work out what road you want to take to your investing goals but i would much rather have a property put money into my pocket each week than take it.

    I hope i have been of some help.

    Take care and happy investing.

    Profile photo of sushi03sushi03
    Member
    @sushi03
    Join Date: 2003
    Post Count: 33
    June 16, 2003 - 3:26 am

    sorry about the long post

    Profile photo of charkchark
    Participant
    @chark
    Join Date: 2002
    Post Count: 7
    June 16, 2003 - 4:04 am

    thanks sushi03,

    I have done a rough calculation on IO loan, and plus tax refund (depreciation) I will be forking out about $35 a week of my pocket.

    I have read Rob Kiyosaki’s book about positive gearing , it seems to be impossible in Australia, I have also read Jan Somers book, which I found to be more achievable. Having said that, I saw couple properties up in Rockhampton or North Cairn, which satisfied 11 sec rule, but it is too far for me, I preferred to buy some where that I can drive to.

    Chark

    Profile photo of hwd007hwd007
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    @hwd007
    Join Date: 2002
    Post Count: 247
    June 16, 2003 - 4:16 pm

    The 11 second rule lasts about 11 seconds. Then comes the rule of thumb which has evolved over thousands of years of wise and not so wise decision making.

    Profile photo of JoffJoff
    Member
    @joff
    Join Date: 2003
    Post Count: 50
    June 17, 2003 - 3:39 am

    Chark,
    By now you are probally already aware there lots of variables in investing, all according to your goals.However,in my humble opinion,the bottom line should always be return on outlays first followed by capital gains.set yourself minimum returns you are prepared accept in order to stay positive geared, then look and look till you find
    a property that also shows potential for future gains/renos/development/sub.div.
    good luck,
    joff

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