I am worried, it's in the middle of no where. It's 75k returning $140 per week. My fear is that the town it's located in is outback rural. Is this a good or a bad thing, There is no mining to come or go and the town only really supports the local farming community. Yes No… uh oh I "don't" want to miss out on another one.
I realise capitol growth is not going to be much if anything. What else should I be worried about ?
Hi Flyingrally
As you mention, the capital growth is not going to be much if anything. You're therefore left with your positive cash flow.
Why not buy it and on sell it with vendor finance (VF)? On-selling with VF has the potential to:
1. get you a deposit of approximately $10,000
2. create positive cash flow of about $270 per month and
3. given you fixed capital gain, i.e. the difference between the price you buy it for and the price you on-sell it for.However I usually limit these transactions to towns with a population of at least 10,000.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Sounds dangerous to me. eg. what happens if the hot water system needs replacing??Your?Positive geared property suddenly becomes negative and you have no potential of growth – so whats the point?
What are the rates, repairs etc all adding up to?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hey I don't think capital growth is out of the question just because it is regional….we bought our first house way out west for $54,000 in small community of just 3,000 people….no mining either only farming and gov. departments….its worth about $220k now…wish we kept it…lesson learned. So I wouldnt write it off just because of where the town is…there are so many more things to consider…such as vacancy rates,average income,the properties location and condition.
Tasmania has houses in that price range .
sounds very risky.
I personally would look in another area where there is industry
Thanks everyone for the feedback. I am going to look further at vendor finance route.
Cheers
Steve
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