There is a property in Nolan St Kerang Vic that I was looking at from an investment point of view.
As I am new to investing I am not sure if I have worked it all out properly.The price of the house is $99,500. it has been reduced so I don't think I can get anything more off it.
It is currently rented at $135.00 per week. which works out at $585.00 per month.
On a principal and interest loan I have to put money in each month which means negative gearing doesn't it?If I get a line of credit loan or an interest only loan then I end up $10.00 a month in front.
According to Mr Broad [ the agent] this is a good deal and I should proceed as the current tenant doesn't intend to move and as the property is within walking distance to the shops [ safeway is next door] then it will always hold its price.
What do you people suggest?
Thankyou in advance
Herb
Others opinions might be different but I don't see enough in this that i would buy it.
I'm looking at at 65k purchase for a larger sized block in a bigger country town that will rent for 140, i could probably put someone in at 160 but l'm not sure for how long as they don't have anywhere else.
I've seen similar or better houses go at auction in town for 71k that will rent for 180 (needed 15k Reno). A beaut corner block that i would have liked at 115k which would renovate and value somewhere near 120-130 on the lower end of the renovation finishes and have a back sub-dividable block that would either sell separate or a nice unit would go on there.
You will be out of pocket if you renovate and won't make the extra capital if you sell and it's not the time to buy and hold, not for something like this IMO. Think $10 ahead each week with IO is a little out i think you will be more like $20-30 out of pocket. It might be your thing to own a property but i need to be able to make some cash or create some cash flow somewhere. Check out the calculators in my link to see the numbers correctly.
Not sure if it has commercial development potential, im not into commercial stuff as yet? If anything at all I would not accept to buy it unless it was 75k max and I could increase the rent some more. Myself I'd say "No Deal".
Don't listen to the agent – do your own investigations. The agent is working for the vendor and in the vendor's interests.
Absolutely, I second that! Not only the vendor but he knows he gets a pay check if it sells.
Hi Herbpeterson
I wouldnt worry about what that agent said, he has a vested interest in you buying the property (his commission)
and generally speaking if a vendor has reduced the price, its because they werent getting any offers.. I would still start with a lower than asking price, (no vendor expects to get full price) start low and go up slow…
ask why the vendor is selling ?
how long its been on the market for ?
have they had any offers yet ?
these are a good indication of how negotiable the vendor will be..
also I did a quick google search on Kerang, its a small town, population 3775 people (which I think is to small) and only 24% of people rent there, which is below the national average
(not good if you have IPs for rent), the main industry there are rual which can be volitile at times due to the effects of weather eg: drought, floods.. all of which would greatly effect the small economy in that town….you said you wanted suggestions from property investors, in my opinion I would not invest in this town.
all the best..
Thankyou for your opinions they give me another perspective.
Herb
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