Subject property value $50,000. Rental return $130.00 per week. No tax advatage. No deposit. Loan amount including stamp duty , lenders fees, solicitors fees, building inspection fees, about $54,000.00. Expenses Loan interest $4,000.00, Rates $1,200, Insurances $1,000.00, Vacancy $420.00, Agent’s fees $540.00 Total about $8,400.00. Income $6,700.00. Looses about $1,700.00 per year. And they are everywhere
It should make money but it doesn’t. What am i missing here.?
if you take an interest only load the repayments are apprx 3753pa
insurance seem high at $1000 on $50k investment – does this include landlord protection? If so you dont need to budget for vacancy..??
Try and rent direct and save agent fees..??
based on loan 3753 + rates 1200 + insurance 250 = 5203pa rent at 6760 pa = CP $1557
if you had 20% deposit the number would then stack up even better
borrow $40k
repayments $231.67 pm or $2780pa
outgoing $1220
total outgoing $4000
Income $6760
Return $2760
Return % on investment ($10k deposit) = 27.6% try and get this return in a bank term deposit..!!hope this helps – if your not going to buy the property pm the details and I will..!!
Cheers
Jeff Aquilina
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insurance seem high at $1000 on $50k investment – does this include landlord protection? If so you dont need to budget for vacancy..??Not sure about that Jeff. insurance that covers vacancy would be nice. Most policies I know of cover vacancy due to damage and broken fixed term leases.
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D&L Property Projects Ltd
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The insurances actually covers building insurance in case the thing gets blown away, public liability and stuff like that. The repayments are based on 7.3 % interest only. I have no deposit I am equity based, I have no tax advantage I make no money. This all very well but I have been looking around this site and some people take the view that a property bought at $50,000.00 should rent for $150.00 per week. This would solve all my problems. i just have to look harder. Look at Hughenden west QLDjjaaus
Thank you for raising my awarnes about the landlord insurance. I actually did have a vacancy in a unit i own in cairns. i asked the insurance company just then about a claim for a month of vacancy between leases and they said NO. So the expense relating to vacancy allowance stands. What is the insurance actually for ? you would probably be better off cutting that. I guess it is for extreme cases where people don’t pay their rent or trash the place. A good rental mananger should not let this happen anyway..
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