hihopes, just a couple of points….
The only way you can know reliable rental returns is to check out currently available *comparable* properties. Check out the rent section on realestate.com.au It’s harder to do this reliably qith houses than units- because houses have different featuresw, size of land etc. With units, it’s easier to see the “generic” price for similar properties.
Also, a RE agent who you BUY from may give you an oversetimate of rental returns to get you to buy the place. It would be best for you to ring other RE agents in the area- they’ll give you a more realistic figure. Online is great, but won’t tell you if a smelter is just about to be built on the block next door.
Regarding yoursecond post in this thread… if you are htinking of selling due to a vacancy of 1 month… then you may be too highly leveraged. Vacancies can be a part of life with IP’s. Indeed, most people calculate rental returns on 48 instead of 52 week tenancies, so they cut slack for 4 weeks off.
You may wanna try for a 1-year lease. If the property is worth its return, and the area is not over-supplied, you should be able to get a one-year lease. Most people don’t wanna move in and out for the rest of their lives.
I don’t really rely on rental return for my properties, as I am into growth properties. But if you eed rents to pay the property back- and have no other source of income- then you may need to rethink how much you’re paying for properties- and only buy positively geared ones- and ones that are tenanted.
Speaking of the last point- I like to buy tenanted properties- the income stream is there from the beginning, and you get to speak to the tenant about what the property is like- can save you a heap and not have you buying a dud.
kay henry
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