Hi,
Just wondering what people here tend to set as a min rental yield on an IP? Somewhere around 5%?
Also, when calculating it, do I take into account Stamp Duty and Legal costs, or is it assessed purely on the sale price of the property?
Cheers!
Hi, I know for myself to calculate a "gross yield" just the weekly rental multiplied by 52 and divided into the price.
In todays market anything under 5% doesn't really cut it for me and beware the rental guarantee!! I.e. If its such a good area and property wy does the rent need to be subsidized?? Dont think your not paying for that in the purchase price!!
Thanks for that. .When you say price, is that the price of the house by itself, or inclusive of all costs and legals?
I made my calculations simple. I bought a prop for $445K rent $445 per week, 2nd prop $390K rent $390 and third $290K rent $290 and the gross yield is 5.2% When I buy a property, one criteria to findout property price is rent X 1000. I ask the rent of the property and offer $rent,000 or less. It works for me. Thanks
That's not a bad rule of thumb. Still acheiveable at the moment?
What I meant was purchase price without costs. So just the price you paid or are intending to pay regardless of stamp duty etc.
What state are you buying in?
Victoria. Plent of stamp duty here!
I see! What sort of property? new/old /apartment/house and land??
What are the yields like down there at the moment? (i'm in sydney)
I've only just started looking. Probably older units/apartments for my price bracket. In the area I'm looking, a place ~$275K seems to fetch about $230-$250pw, so might have to look around a bit more to get a 5% yield!
How about down your way?
Hi
Very happy now! Getting $180 out of $128k purchase price. Depends where you are looking. And bargain hard. The property I got was on the market for a year (needs a bit of work of course, but that's ok I can add value) Asking price $134k bit of to and fro-ing got it for 128K. Plus it came with a free tenant (
) But each person is different and likes different risk, areas etc.I just want to know if anyone has actually got a good deal at an auction in the last couple years? Or has it just been a stooge?
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email Mehi Dwolfe,
I bought a house at auction in a large regional area of nsw for $120,500 at the beginning of 2008 and rented it for $165 per week and that has now increased to $175 per week with a great tenant, I am very happy with this purchase. cheers Sonya
Hi Sonya
Nice work! It is really great to hear that people are buying great properties still. Do you mind if I ask where? I like to stick to the state I'm living in at the time so It's unlikely I'll be up there
Just an approx zone out of curiosity.Well at least I know that you can get a good price at auction still, depending on where you shop.
Thanks Sonya
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email Mehi D,
My property is in the northern region of New South Wales, incidentally I haven't actually seen my property, i bought it and another property 'sight unseen' other than what i had seen via the internet. i relied on professional building and pest inspections and doing the reasearch on the rental market of the area. i am currently in the process of looking for one or two new properties to invest in
Cheers
Sonya
Anything above 5.5% is good considering that a savings account returns approx 5%.
Purchased an inner-city apartment for $310k, rent at $415pw. Gross yield at 7%
Properties like these are out there, you just need to find 'emYield in sydney at the moment can definetly be good, its easy to find 6%+ no problems
Hi Sonya,
Didn't see mine until the week before closing. At lease with building and pest they can give you a written report and give u some rough guesstimates on costs for repairs. There's nothing that I would be able to tell apart from yes it has a roof. If it counts I looked on Google earth. If all the $$ stack up I am buying.
Cheers Let us know when u get u next ones under ur belt.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeHi
I'm new to this site and positive cash flow investing and I'm enjoying reading your forums.
I've been looking at IPs to invest in and am having trouble finding positive cash flow properties in SA using Steve's rule of thumb of dividing the rent by 2 and x 1,000. I'm also disadvantaged because SA is the only state where I can't vendor finance. Should I be looking in other states because wraps seem to be Steve's preferred investing strategy?
I've seen a Defence Housing Property that claims to be 4.75% yield, which isn't great but is guaranteed. My question is how do you buy a property with a 5-6% yield without being negatively geared if you don't have a lot of cash to put into it? I know the answer is probably that you can't!
I'm using the equity in our home to purchase so can't be too negatively geared as I would only be able to buy one property. I have also been looking at subdividing or renos. Do any of you investing gurus out there have a magic formula?
shakenbake wrote:Hi, I know for myself to calculate a "gross yield" just the weekly rental multiplied by 52 and divided into the price.In todays market anything under 5% doesn't really cut it for me and beware the rental guarantee!! I.e. If its such a good area and property wy does the rent need to be subsidized?? Dont think your not paying for that in the purchase price!!
It is easy enough to do your due dilligence to see if the property is overpriced! And with the rent guarantee being a tax deduction why not cover your self! Minimise the risk so you can sleep at night!
) But each person is different and likes different risk, areas etc.
Just an approx zone out of curiosity.
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