As a member of Somersoft I have had great assistance and have just come across this forum so I thought I would seek assistance from here.
I currently have 250k Cash + 100k salary with no outgoings except 160 a week rental costs.
I was very close on purchasing a property for 920k (250k deposit + 720k loan) which had guaranteed rental return of $6000pm fpr atleast the next 2 years. With mortgage repayments being around 1200pw it would have been great return however I have just found out the council identified an illegal granny flat and have ordered it removed. This is yet to be done (estimated costs 10k unless it can be converted back to a garage)
I was the put off on this property however there is still a lease on the main house for 1175pw (gf was 275pw) until 2013 which means the house is just about cf+
The house is currently split as a duplex with 4 bedroom upper and 3 bedroom downstairs. Once the external granny flat has been removed application can be made to have a legal duplex or lower granny flat approved.(apparently your not allowed 3 kitchens on any 1 property)
Anyway I will be cf positive from day 1 and can start saving my wage for my next ip.
This house sold for 710k in 2005 and I elieve is still being let go cheaply due to council orders which no one wants to deal with.
Does this seem like a good idea considering all the council issues or is this a chance for a good bargain? or should I be spending less and looking for similar cf+ properties. This w/out the granny flat would still be 6.64% return for 2 years guaranteedlextsy wrote:Once the external granny flat has been removed application can be made to have a legal duplex or lower granny flat approved.(apparently your not allowed 3 kitchens on any 1 property)6.6% is not CF+. Don't buy it wishing you can change things that may not eventuate.
Application to get the lower granny flat may not be easy. To separate them you have to have a fire wall between them. VERY expensive (if at all possible).
Lot of unknowns here. Be very sure of what you CAN do, not what you might be able to do.A good start with the due diligence with dual or multi income properties is to see what your insurer says as well as what council says, controlling risk is very important here.
Catalyst is spot on, have a close look at what is legal at the moment and don't assume you can fix a problem.
With that kind of deposit and borrowing power you have a wide array of choices, don't get fixated on making any one particular property fit into a box it's not designed for!
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