Hi All
This is my first time on this forum, and I'm not sure if it can be used for this purpose, but my husband and I are changing tact with our investment strategy, naturally after reading Steve's books!
We're now realy excited and motivated to take action and see where things take us BUT have first decided to sell our home and investment property at the Cairns Northern Beaches.
Obviously we would prefer to sell the property ourselves and save on the commission, which could be a deposit on another property, but are reluctant to waste time in trying (we've sold property oursleves before with For Sale By Owner), especially as we're so keen to get started on our new journey!
I thought I would post some details of our home, and investment, in case any keen investors were interested in contacting us before we sign with an agent:
We have a 647sm block of land with two 3 bedroom townhouses, and one 4 bedroom townhouse, a stones throw from the beach, 2 restaurants and local shops. They each have 2 bathrooms and a private courtyard. They were renovated in 2005 and won a Master Builders Award for their design and workmanship. We live in one and rent the other two. The two 3 bedroom residences rent for $380 per week each. The 4 bedroom townhouse could acheive a rent of $400 a week. We are 10mins from Cairns and 7 minutes to the International Airport. Each townhouse has a large deck with ocean views and there is huge potential for capital gains. Each town house has it's own title so can be sold separately if required. We're ready to pack up and move South so we're keen to sell all three as one package.We've had them valued and can realistically ask for $1.25m.
As I'm not sure how this works just yet, I don't really want to post all my details on line, but if anyone's interested in obtaining further information on our proprty let me know and we'll work out a way to get in touch!
THANK YOU and regards
cgraham1
That's a POSSIBLE rent return of only 4.8%. Finance is 8% now.
On a $1.2 mill investment? No thanks.
IF, I say IF again; you could put down a 20% CASH deposit plus costs (5% of purchase price approx) = $312,500,
the loan will be $1 mill @ 8% = $ 80k per year, interest only; thats $1538 per week.
rent is possibly $1160 per week, 20% will be eaten up by holding costs and vacancies = $928 nett rent per week.
shortfall on the weekly cashflow is -$610. Let's say the holding costs are only 15%; that's still a whopping -$552 p/w.
Admittedly there are tax deductions and depreciation, but even at say, $10k per year, the weekly shortfall is still -$410 based on the worst-case scenario of 20% loss in rent to holding costs.
If you had to use equity to fund the deposit and costs as well, the equation gets far worse : -$1409 per week before tax returns.
let's call it an even $1k per week out of pocket.
Who can afford that?
Your best bet is to try to sell it to owner/occupiers I'm thinking.
I guess another option for you, or for another prospective buyer, would be to buy all 3 and then sell 2 and keep one. That would be more appealing.
Then you have one cashflow positive asset.
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