My partner and I are looking at a Cashflow positive deal (before tax deductions), but would appreciate input from others as this is our first IP.
The property is rented through to Jan 2010, CF+. The current tenant has been there 3 years and is keen to stay on. The agent has been quite honest by indicating that the tenant isn't as "tidy" as they would like, but has always paid rent on time. The house is fairly messy, including the front yard.
I am thinking we have two possible paths (if we decide to purchase)
1. Leave tenant in and keep getting the CP+ rent, keep maintenance to a minimum.
or 2. Wait for lease to finish and dont renew. Then conduct renos (carpet, painting, etc) and look to increase rent and aim for a tidier tenant.If the tenant pays on time this is to be valued as it is extremely annoying when they don't
Worry if the front yard has two wrecked cars in it and the council is calling you to have them removed (don't laugh it happened to my parents)
Worry if there are broken windows.
While you do up a property it can take up to 3 months or more depending on trades people.
You will lose at least 3 months of rent by renovating the property I know as this was how long it took to get my renovations done in between tenants.More details:
- $110,000 Purchase price
- $7,000 Purchase cost
- $120/week repayments
- $140/week rent
It in the country, and unfortunately we wont be able to get to see it prior to purchase. Will be relying on a Building Inspection to assess the current condition of the property
Did you buy the property unseen??
You also need to consider where about the property is i.e. on the major regional or small rural town.
Haven't pruchased as yet. It is a mid-sized town about 13,000 people with a train line to the CBD. Reasonable employment there too
Does it start with B?
No it doesn't, ha ha. I haven't actually said which state it is in.
Can it be financed in such a town.
Richard Taylor | Australia's leading private lender
Good question Richard.
I would assume so. Have there been cases where finance is not available in Country locations?
My intention is to offer subject to finance and inspection, so if we cant secure finance then we are coveredI had major problemos trying to finance in Ceduna, SA, do to the remoteness. But that property fell through due to other reasons anyway. (which I am now thankful for haha)
Its not that far out. Only 3 hours from CBD.
Yes in the current climate finance can prove difficult for small Country Towns especially where the LVR is greater than 80%.
Get your mortgage broker to check out the post code prior to committing to the Contract.
Richard Taylor | Australia's leading private lender
You must be logged in to reply to this topic. If you don't have an account, you can register here.
