I have been actively looking for properties that may be or come close to being postively geared. For information you should check out Elizabeth in SA. It has always been a cheap suburb as it has traditionally catered for low income earners who can’t or choose not to buy. I grew up there. There has been a major renovation of the Main Shopping Centre. The immediate areas around the shops are also receiving some renovation. eg 2 bedroom units within 200 metres of everything fully renovated with security acccess and a garage are selling for $115K. Expected rent being 160 per week. Does not look bad to me. What does everyone else think.
IT’S ALL GOOD.
Well $160 * 500 = $80,000
So I guess you need a bit more creativity or at least patience.
People on this site say they are out there is you look for them but I am begining to think thats all bullocks. No one on any of thee forums has said I bought this house recently and it is postively geared. They don’t exist unless you spend dollars on a reno of you sub divide. The problem here is that you still need access to a lot of cash to make these things happen if you are starting out. Most people who are starting out barely have enough for a deposit never mind money for reno’s etc.
IT’S ALL GOOD.
Go back and have another look. Try commerical, try remote areas with mining booms, try bulk flats/villas/townhouses.
I would be inspired if someone could tell me about one property they have bought in the last 6 months that was cashflow positive!
IT’S ALL GOOD.
Elbows,
Maybe the property you mentioned might be a good one for you to start on, Elizabeth has shown the start of some good growth figures, with something like 18 % meidan growth in the last year. If you can, this may be a good starter for you rather than the increased risk for a first time investor of going commercial or spending a year searching for something ‘perfect’. Do your research and you will succeed. Good luck with it!!
KendoOK elbows, let’s do some numbers first.
Assume all up it costs you $5000 in taxes, fees, stamp duty etc to close so you pay $120,000. Assume also that you have the house occupied 48 weeks a year (8% vacancy, I’m being cautious on your behalf) and finally assume that you’ll lose 20% of your rent in maintenance, land tax, agent’s fees and similar costs. You take out an interest only loan at 7% = $8400 and your net income is $6144, leaving a deficit of $2256 p.a.
Lets assume you can get depreciation allowance of $2000 so you lose (in the ATO’s eyes) $4256 leading to tax deduction (assuming 30% income tax bracket) of $1278 p.a. Now, what you have to do is use your brain to turn this property which has cost you zippo in your money from something that loses you less than $20 per week to something that gains you the dough. Maybe a roll-a-door would cost you $1500 but be worth an extra $10 per week? Installing broadband or FoxTV?
Or maybe you can make a deal to buy a few of them for a discount – you’d need a $14,000 discount on the above figures to break even – that’d be a bit of an ask. If you have your own cash, 14,000 (on teh above figures which are really rough) is your breakeven point.
Keep thinking.
As for recent examples of cashflow positive, I hear that Kalgoorlie, and Karratha in WA are good at the moment. I don’t invest in such places and nothing in this post should be taken as recommendation. But you should seriously consider talking to people about potential DEALS. Finally, is that $115 the selling price or the ASKING price?
Thankyou for your replies. But again there is lots of talk about were the good deals are but still no one I have spoken to on this site has actually bought one themsleves. I have now decided to stick with the property I have for a while and waite and see what happens before I go further. I really don’t want to stop at one property. I want more. Thanks again and would still ove to chat with someone who has bought positive cashflow recently.
IT’S ALL GOOD.
Feeling a little negative at the moment.
IT’S ALL GOOD.
Elbows you will not get a nice little house in a nice little area just fall in your lap that is CF+ but you can get one, I know it can be acheived, I`m looking at one at the moment.
You need to be a terrier and a real sucker for punishment to make them work though, some can be very hard to get loans for and can require some hard work but little money to get them rentable.
If your interested email me and I`ll give you some examples.Thanks for your reply. I have decided to sit out of the market for a while and see what happens. I have one property that is going well. I will save my cash for the bargains that are sure to come in the fututre.
IT’S ALL GOOD.
Sorry to hear you say that, elbows. Sitting on your …er, hands… will not get you any exercise, especially mental exercise, the most valuable kind.
WHY aren’t you going out and looking for deals you can make into +CF? Or investing in Kalgoorlie? Or Karratha?
Obviously your money and your call – but ask what you could be doing with your funds that’s better than nothing, and at least do that!
Have you bought positively geared property recently quigles?
IT’S ALL GOOD.
Originally posted by elbows:Have you bought positively geared property recently quigles?
Yes, in upper New York State, since you ask. It’s not an easy market. Friends of mine have, in the last two months, bought positive cashflow properties in Karratha and Kalgoorlie, one got a steal in Western Sydney and I put up a property for sale with over 7% returns just recently. You can PM me about that. I only mention these because you seem convinced that the deals aren’t there.
Elbows..cheapest IP I came across a while back was $12k..It was +CFas well…but there were only about 30 people in the town..
ATM I’m getting great CG on my IP’s so am not even looking for +CF, the good ones are harder and harder to find, though I “know” some people on this Forum who serach hard find them..
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorThanks for all advice and comments. I will not give up and I will keep looking.
IT’S ALL GOOD.
Hey Elbows,
I purchased a property in ROMA, Queensland.
Here are the details:
Old house that had been converted into 2 flats, 1×3 bedroom and 1×2 bedroom. Asking price was $92k, I bought for $74k.
Spend $1000 on paint and carpet tiles
Current rents are $120 & $100
Cheers,
Batts
Hi Elbows
I bought a one bedroom unit in central Darwin in April this year. I paid just under $95,000 and spent about $1000 on paint, new door handles in the kitchen etc. I am getting $300pw rent. It has always been tenanted except for 2 days with a changeover in tenant.
Now THAT’s CF+
Cheers
K
I like to sound of that one. I will keep looking.
IT’S ALL GOOD.
elbows,
You want a story, well I’ll give you a story and true. And there is others who can vouch for this!
Somebody has jus suggested bulk flats and it works for us. $120k purchase price and we chose to spend about $2000 to do fixup jobs for the tenants, anyway 122k say, for rent of $110 per week * 3 units. ie; 330 /week for $122000.
The town has approximately 10000 people. We know that there is only moderate capital growth but to hold this property is our intention and use the rent as income later.As you say -“Its All Good”
Cheers for now Len
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