Hey guys,
New to the forum, think its a great source for opinions.
Ok, so I am pretty much a beginner, I've been working at my first proper job now for 6 months after uni, and wanting to get into property. I am eligble to recieve the FHOG, and can get a loan of around $250K+ .. or more If my parents back me. I'm in Sydney btw.
I've read a few books, and thinking of doing positive gearing, and I think that with the interest rates going down, rent increasing, property value decreasing … that now or soon will be the time that positive gearing will be more available in Sydney. All i'm doing atm, is reading up on some boks, reading Steve Mcknight's original book atm, and also just browsing prices to get the general feel … will goto an auction to see how it operates.
But I know I have plenty more to learn, and wanted some guidance. Like what should I be learning (any books, courses, websites etc …) and where can I get information regarding price history of a suburb/street … and how to evaluate how much a home is worth? Any help is appreciated. Thanks.
Have a look at Australian Property Investor Magazine especially the back pages where price data is published.
What you need to do is figure out how much rent a prospective property is going to earn each week. Then work out what the expenses for Council Rates, Water Rates, Insurance, Maintenance I usually as a rough guess allow $2000 a year divide by 52 to get weekly cost.
Now work out what the interest rate is likely to be from the bank and take the amount you need to borrow and multiple by interest rate/100 if % and then divide by 52 to get weekly cost.
You may want to download a template in excel called amortization so you can work out a P & I loan rather than just interest only.
So if expenses + interest < weekly rent minus say 7% for property manager costs
then you have a positively geared property.
I saw a general rule where you half the weekly rent and multiple * 1000 to work out what you should pay for the property to get a positive situation but I prefer the long way as you can show the figures to the bank to show you can afford the loan.Thanks for the reply, definately helps alot.
Does anyone know if theres any particuliar suburbs to avoid in Sydney?
Was looking mainly at the surrounding suburbs of the city .. eg Surry Hills, Ultimo, Darlinghurst. Thoughts?
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