I have found a well located property in a strong regional area. It is in a block of 8 units, long term tenant shows 8.5% gross, nett after body corporate (including sinking fund) and rates is 6.0%. Rent is slightly below market.
After paying a 10% deposit this leaves it as a neutral cash flow as there are no depreciation benefits.
Does anyone have an opinion as to whether this fits within acceptable criteria?
Any input would be appreciated.
Thanks,
DennisJust bringing my message back to notice in the hope of some replies[
]1. No one else can tell you what is an acceptable rate of return for you; only you can.
2. Create an investing strategy and write it down on paper. You need to detail your key investing tenets, eg goals, acceptable risk, area, exit strategy, capital growth or yield etc.
You and only you can decide these goals for yourself, and for anyone else to say this is or isnt within ‘acceptable criteria’ would not help the situation. You must take responsibility for your own investment needs.
hi,
Capital gains????
you said that the rent is just below market. Can you increase the rents or are they on fixed leases.???
with the information that you have provided i would have to say be careful!!!Hi dennis
my criteria is the poperty must return $30 to me each week.
that is
Rent
less
interest
rates
water
insurance
agent
balance $30 pw to cover vacancy, repairs, profit to me
Also this would be for a property up to say 60K if it was say 100k i would like 50+ pw.
this is my criteria and as others have said work out your own, what you want to achieve.
i also like to buy properties that i can add value to, cheaply
regards westanHi Dennis,
One thing to consider:
A block of 8 units would usually be considered a commercial loan instead of residential. Higher interest rates.
How would the figures stack up then?
Del
Sorry Wilandel, This is one in a block of eight.
]
The topic ‘Acceptable Return ?’ is closed to new replies.
