All Topics / Help Needed! / Is this a good deal? Cash flow positive?

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  • Profile photo of KJKJ
    Member
    @kj
    Join Date: 2005
    Post Count: 3
    May 22, 2009 - 11:14 am

    I'm looking for the numbers people to tell me if I'm doing my maths correctly. 

    There's a property with an owner keen to off load, motivated seller, etc etc. so it's just listed at what seems to be a reasonable starting price. Looks to be done up for sale which makes getting tenant post sale faster I guess.

    140k is asking.

    The agent said that it last rented for $185. 

    That's positive right? What interest rate does it stop being positive? I've compared to last sale prices and other properties in the area. Seems good.

    I don't want to give too many details about location, it's in Tas if that makes a difference. (stamp duty etc)

    My finances are on the tighter side and the economic situation in Aust is so uncertain so I'm being aprehensive.

    Would welcome any advice or things you think I should consider.

    Profile photo of Pro investorPro investor
    Participant
    @pro-investor
    Join Date: 2003
    Post Count: 108
    May 22, 2009 - 6:20 pm

    Hi kj

           I need more info how much are the rates for the property, is there a body corpate if so how much per year, and what intrest rate are you looking at to get the loan.

    Thanks Rob

    Profile photo of WJ HookerWJ Hooker
    Participant
    @wj-hooker
    Join Date: 2007
    Post Count: 272
    May 23, 2009 - 6:58 am

    kj
       As above, what amount are you going to borrow, do you need to pay land tax after purchase, what is your income, etc etc.
    Just right it all down, everything. What depreciation is going on house, what are the rates, etc.

    Work it all out – use a calculator.

    Don't forget its not a simple matter of so much rent on so much cost equals positive or negetive cash flow. Go to the library and borrow a book on rental properties or use an on line calculator. Also take note – the lower the cost of the house the more percentage rent you need compared with a more expensive house. This is due to rates, repairs etc not being directly related so much to the cost of the house.

    Good luck, but as you say, Australia and the world is facing a big recession ( deprecion ?) So be careful.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    May 23, 2009 - 3:21 pm

    And, just because it is cashflow positive doesn't mean it is a good buy. You would want capital growth too. if the value doesn't up there is no point.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 4 posts - 1 through 4 (of 4 total)

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