Any WA Investors still buying +CF IP’s in any State/NZ/USA?
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorNope
Yessss
if the price is right, then yes.
http://www.megapropertygroup.comINVESTMENT SALES * RENTAL SOLUTIONS * STRATA MANAGEMENT
Yes…all in the Perth metro area despite the bleating that they don’t exist.
We’ve nailed 3 good’ns this year. Looking at 5 +CF IP’s currently (all within 0 to 7 kms of Perth CBD) and should have the 4th and last for the year under contract before year’s out.
All but one of those five meet our prime criteria of the dirt being at least 85% of the value of the prop.
It’s all good with the goggles we are using to view the ‘property market’…whatever that gross general term really means.
hi dazzling
don’t put me in all your postshere to help
OK gross, I’ll remember that for next time.
You better hope that no-one joins the forum with the name “a” or “the” or “I”….you’ll be hooped. [biggrin]
Dazzling,
What price range are you looking at and what % deposits are you putting down to get +CF in Perth.
I have been looking around for a while and I’m actually flying over next week to look at some properties. However, I’m hard up trying to find one that yields at 5%. I’ve been looking at various suburbs within 10 km of the CBD around the $220K mark and below.
Simon.
I wouldn’t have thought 5% would be hard to find. what areas are you looking in?
http://www.megapropertygroup.comINVESTMENT SALES * RENTAL SOLUTIONS * STRATA MANAGEMENT
Simon,
If you do a search on Dazzlings posts you’ll see some deals he posted a while back that we’re pretty good..WAY above $220k though..
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorWhat price range are you looking at and what % deposits are you putting down to get +CF in Perth.Price ranges vary from expensive to outrageously expensive.
I put nothing into the deal, except residential equity. Borrow 100% of the purchase price plus all costs. They are +CF on this basis. This means that they are typically yielding more than 7.7% nett.
Any other basis (like 10 or 20 or 30% deposit) and the IP really isn’t +CF…or to my way of thinking it isn’t.
Dazzling, why do you say that any depost thats made towards the loan will make the property cf negative?
Iam very new to all this, i used to think the more the deposit the better. you pay the laon off sooner, the lesser the interest etc etc. obviously there is more to it???
yield has nothing to do with cf+ / cf-
yield is simply nett income over purchase price
(expressed as a % of course)
cheers
brahms
Purveyor of Fine Finances
aka Mortgage Broker Brisbaneyield has nothing to do with cf+ / cf-You cannot be serious ??
1. Mortgage is 7%
2. Nett yield is 10%….IP is CF+ve
3. Nett yield is 3%….IP is CF-veI suppose we’ll have to agree to disagree.
not at all
yield is yield, its a mathematical equation – whether the property is cashflow + or – is purely relative to the individual purchasers overall position.
cheers
brahms
Purveyor of Fine Finances
aka Mortgage Broker BrisbaneHave to agree with brahms.
Furthermore, the concept of yield is more relevant to commercial real estate where it is used to determine both the market value of a property, and the potential rent that should be charged.
Prevailing market sentiment determines where the yields should be, and property values are worked out the current yield.
ie…when times are good, business is prosperous, and the economy is strong, the yields may be down to 7% or 8%, and conversely when the economy and business are struggling, vacancies may be high and the yield expected may be around 10%It has been’borrowed’by the residential property brigade, where it does not necessarily make a lot of sense as a figure.
If it was broken down into ‘gross’ yield, and ‘nett’ yield, then it might make more sense as an indicator.The variable between the two, is the expenses incurred on a residential property which are traditionally paid for by the owner ( but not always the case!)
Therefore two residential properties with the same market value, and the same rent return will have the same gross yield, but not necessarily the same nett yield as the outgoings or expenses will probably be different, thus one will nett you more rent after costs than the other.
Clear as mud eh?
kp
If it was broken down into ‘gross’ yield, and ‘nett’ yield, then it might make more sense as an indicator.Exactly…but then, that is what I have been saying all along.
I have been looking at Glendalough, tuart hill, morley, Dianella and surrounds. All around the $220 and below, 2×1’s.
Average yield I have found is around 4%.
But I am obviously looking at a completely different thing to Dazzling.
Simon
Are you able to put up your formulae for calculating these returns? I know that there is a great variety of calculations by different people; some include depreciation, some don’t; some calculate it over the purchase price others only include the deposit (where does the repayments fit into this????).
I’d just love to know, for myself how to best judge the return of our first IP!
I had thought it would be all the money you earn (rental income & CG), divided by all the money you put in (Deposit, fees & Charges, interest/ loan payments, PM fees, etc).
Can any-one elucidate?!
Cheers
C@34Our greatest weakness lies in giving up. The most certain way to succeed is to always try something one more time.
– Thomas Edisonhi dazzling
I work out my return as
my money in (inc all my costs)
lend and tennant
my money out (asap)(if possible) usually 6 months
even on the development sites.leave for growth and then draw on equity.
my marrickville 19 units come on the market around jan next year I’m holding 3 the other trust members want to sell and move on
I hold 1.5mil owing 1mil my cash was in and out within 4 months and the builders built them. I’ve picked the 3 best units and walk away with 1.2 mil neutral and the equity is going into my next project which will be known very soon.
Hence the question if you had a million what would you invest in.
To see if there something better from my equityTo calculate I look at the cost of my money.
here to help
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