A two storey house with granny flat downstairs. Each area can be rented out seperately for $200 – $250 each making a rental income of up to $450 per week. I've heard the town has potential because it has almost no facilities now but will boom whenever it gets a shopping centre etc. It's only 15-20 minutes from Noosa so it's not too isolated. A similar house without a granny flat nearby recently sold for $399,000 and this is advertised now for $379,000. How does this sound and what other factors are important?
G'day
as someone who lives 3hrs north of Noosa and has a son at Uni on the Sunshine Coast I visit about once a month…heres my 2 cents worth.
Who would rent it? The Sunny Coast is pretty depressed economically at present (not just those in tourism)
Noosa is at the top and relatively (in SC terms) a fair way from the hub (lovely though)…add another 15-20 mins which I assume at that price is N/NW and you're limiting your market again.
Look at the competition, not just in that area but around Noosa/Noosaville and you will see that there is plenty out there in the rental pool. Don't always believe the prices on websites either, a friend just secured a 3br resort townhouse in Noosaville for $250p/wk rent that was advertised for $315……..times are tough and some will bend a fair bit cos a lot are desperate investors that need to at least cover high BC costs
Hi Bomberboy. So you're saying the further you go from the hub (I guess you mean Maroochydore?), the harder it is to get a decent rental income? I still image renting out both updatirs and downstairs for $200 each per week is very possible and would still bring in around $400 a week. With this in mind, I'm interested in what others think about buying a house for $379,000 (or less if the price can be negotiated) that can get $400/week rent? If anyone has bought a city apartment or residential house in Australia recently, I'm interested to hear how the comparisons?
I've just read on a news website that Brisbane people have lost confidence in government etc which has in turn reduced prices in South-East Queenland making it a good place to buy. In addition to that, the tourism slump has further reduced prices on the Sunshine Coast which is why I think that area has potential at the moment.
You have to consider these factors when approaching a rental property as an investment.
Frequency of tenancies – How long will the tenant be staying? Each new letting incurs a letting fee and this will affect your overall investment net result. Every time your property remains empty there is a potential for it not to be filled. Slight .. but possible.
Security of Employment – You dont have a magic crystal ball to predict the future. But if you cant see the existing industries surviving 10 years .. you are looking at the potential for a dead investment. No-one to let to .. no-one to sell to. And that can be the end of your investment.
Convenience – What are the important factors for living and working in this town or city? Does the property meet those conditions at the time of purchase? Transport, shops, access to local roads.
Condition – Is the property ok to run for another couple years without maintainence being necessary? Is there problems with the placement or security of the property in the near future? These should always be in the back of your mind.
Market – Does your property fulfil the requirements of the current tenancy needs? If it does .. is there a ready market for your property in the near future? DONT ASSUME THIS – INVESTIGATE IT. It can be that the market for a certain type of property just stops being wanted or relevant without modification.
In my opinion the numbers dont work unless you can get around $600 – $650pw in rent.
EngeloRumora | Ohio Cashflow
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Thanks xdrew,
Interesting comments!Engelo, Yes, I guess many people would like to borrow $380,000 at 7%, then collect $600-$650pw while paying around $510pw interest. Do you know how to spend around $380,000 and get $600-$650pw rent? Is it secretive or can you share?
I've noticed a few houses for sale for around $400,000 and only being rented out for around $300pw. I can never work out why people hang on to those type of houses. Why don't they sell and buy something with better returns?
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