All Topics / Help Needed! / Borrow triple for block of 4 units? Or a house?
What would seem like the better option to you:
1. Borrow $600K for a brick block of 4, 1 bedroom lowset units with carport on about 800sqm land in a growing area close to everything (including water, about 5-10min walk)? The current rental income is $600/week. I may need some guarantor from parents for deposit on this one. If I keep them rented I can make up the payments.
2. Borrow $250K (approx) and buy a 3 bed house on small block of land – possibly borrow up to $300K with rental income taken into account. Rental income anything from $180-$290 at a guess, depending on which property.
I do not have a lot of money saved but am desperate to get into the market – I know units are cheaper, but I think the land value long term would have better capital gain, which is why this block of units seems interesting…. Also I have the possibility of living in 1 and renting others if I need to? But they are 1 bedroom units which is not the best is it – harder to rent?
I have no idea which is best – I have been looking around for about 5 years, but only had ability to buy in last 2. Would really love to start this year!
Thanks for your help.
salSal,
Quick calculations
Units (4) $600k vs $600 pw rental, return 5.2% gross
Units (3) $600k vs $450 pw rental, return 3.9% (you live in 1)
House $250k vs $180 pw rental, return 3.7% gross
House $250k vs $290 pw rental, return 6.0% grossOn the numbers if you can find a property for $250k and obtain $290 pw rental income this would be your best bet.
You need to decide what is the purpose you intend to invest.
I have several one bedroom units, they are ideal for single people and / or students, in this instance I believe proximately to public transport is important. I have no trouble with sourcing tenants for one bedroom units. Having said that I believe it is easier to see 2+ bedrooms than 1.
Hope this helps
Cheers
Jeff Aquilina
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$600K also seems a big first step, especially for someone who appears (from your post) to be a first timer with limited funds.
I recomment starting with something less complex and work from there.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958
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