Forum Replies Created
G’day Arty,
Convincing the “other half”, not the easiest task in life…[
]I signed a contract on a 3 bedroom property last week, purchase price $88k and will return $160 p/w as is. Ahh, I hear grumbles out there “but this doesnt fit the 11 sec rule”
But wait thee’s more!
One of the bedrooms is a long room, with an entry door at either end. Spoke to the builder that did the building inspection, and he said cost approx $1000 to put a wall in. Now once its a 4 bedroom I will achieve $190 – $200 p/w, as this area had a lot of familys and a real shortage of 4 bed homes. So Cost to me is $1000 yet i receive $1560 in extra income (assume $30 extra p/w x 52) which is a 65% return p/a
But wait there’s more….
The house has no A/C, and installing it will cost about $6000. THis will add $20 p/w in rental income. Producing a return of 17% pa, not as good as the wall return, but still good.
But wait there is more….
I purchased the house approx $12,000 below market value (in the opinion of the building inspector) because the house never actually hit the market (hence BEST deals aren’t found on realestate.com site)
So House is worth about $100,000 at time of purchase, but with 4th bedroom and A/C value is closer to $130,000
Total debt is $88,000 (purchase price) plus 4th bedroom $1000 plus A/C $6000 = $95,000 (plus costs)
Cost $95,000
Rental return $200 – $225 (passes 11 sec “rule”)
Valuation $125k – $130,000Positive cashflow + about $20,000 in “free” equity
Very exciting times…
And have to thank Mel for all her help in assisting with Finance. [
]Cheers,
Battz
Thanks Karl,
I was starting to think I was the only one who had read the book….
Well I didnt really read it, just looked at the Pics..[
]
]
]
