Forum Replies Created
G’day Jim,
You need to set your goals and invest accordingly. If cashflow is important to you then it sounds like a good opportunity. However, the LVR on a 1 BR apartment will be low and therefore you need to have a bigger deposit. The capital growth for a 1 BR apartment is lower as well.
Assuming a 70% LVR and purchase price of $170k, you would need around $60k deposit (including closing cost). With that kind of deposit you could buy a bigger property with better capital growth prospects and if you invest in the right areas you may still be able to get positive cashflow.
aGood luck!cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
G’day whoops,
I recommend Nancy Keep as well. She is a property investor herself and has very good network of associates.
I have been using her services for many years now and am highly satisfied.cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
There is now speculation that US might drop their interest rate.
cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
Hi kojo425288,
You should consider the stamp duty as well. When you sell the property to her she would need to pay stamp duty again.
As Simon suggested, I think the cleaner way would be for you to give her a deposit and buy in her name to start with.cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
Hi Michael,
When is it scheduled to happen in Melbourne and are there free tickets for that?cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
Hi vyaw2003,
You can claim the property expenses on a pro-rata basis. I am not sure what .20% is in your calculation.
The other thing you can look at is depreciation.cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
Hi shanshan,
Firtly, welcome to the forum.
Before making any offers you need to consider a number of things:
1. Based on the numbers you provided, the gross rental yield is 5.95%. I wouldn’t really call this decent gross yield.
2. The fact that the property has been on the market for 6 months and has not sold means there are not too many people keen to buy it. As you said it could be the steep driveway or is there something else? I wouldn’t worry too much about getting a soil test but would definitely consider building, pest and independent valuation.Based on the above, if I were to make an offer, I will do so at 15-20% below asking. Remember you can easily increase your offer price but can’t drop it.
You should also check if the rent is at market value. Usually with long term tenants the rents are below market value.
Unless you live in the same town, I suggest use a property manager.
cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
Hi Col,
I think it depends on why one buys a property – is it a trading deal or buy & hold deal? I would have personally kept the property and redrawn equity to put into another deal. That would have increased the repayments and made the property cashflow negative or neutral but I would have reviewed the rent (in light of the increased property value) and therefore still able to keep is cashflow positive.cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
Hi Tara30,
Its not unusual to pay 8.8% in country towns. I am assuming that includes GST. Other charges are also common and within reasonable amount.
That said, have you shopped around? You could contact couple of other property managers and ask them to give you a rental appraisal and schedule of their services & charges.cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
Hi ao,
I do not think its illegal to offer high rate of return as long as you can pay the interest and principal. In fact I offer slightly better returns myself.
With respect to the documentation you could do both ways – you could complete a Statutory Declaration and get it signed by a JP or do a proper loan agreement through a solicitor.
Just out of curiosity – are you offering any security?
Good luck.cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
Good one, Milly
cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
I’ve got the DVD. Its great, isn’t it?
cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
Hi PochPoch,
The way I look at it is if the “dodgy” suburb has got the right infrastructure (in terms of transport, schools, shops, hospital, etc.) it will eventually pick up. In the long run there will be enough demand and therefore both rents and capital value will pick up. The answer lies in your investment timeframe. If you are expecting to make money quickly then it may not be such a good idea to buy in one of these “dodgy” suburbs.cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
smartin12474,
Make sure you speak to the accountant regarding the structuring. You may need to speak to a solicitor as well. Structures are important to protect your ass(ets).cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
Hi Joel,
You could look using a long term deposit bond or bank guarantee instead of using your savings for 10% deposit (that said there are some conditions to get a long term deposit bond). Alternatively, negotiate a $5k deposit or something small like that. That way you can use your money until settlement time comes.
I have not done much research myself but $349k for a 2 BR apartment without a car park looks bit excessive. If you have 10% deposit ready, why don’t you buy an apartment now and use it for residence/rent now? There are plenty of 2 BR apartments without car park for around $250k.cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
Do it at your peril.
cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
Hi George,
I have personally not dealt with these guys but thank you for warning fellow investors.cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.” – Nelson Mandela
Thanks Jamie for your post.
I couldn’t find meekethara on realestate.com.au and then I did a search on Australia Post website and it does not exist there either.
Is the spelling correct?Cobar in NSW is still showing great returns. I am buying a property there with 10%+ rental yield.
cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
G’day Colin,
You should consider the following before making your decision:
* Limited capital growth
* Low LVR
* Lower control over the property in terms of renovating or adding value
* High management costs
* As raddles mentioned, you need to look at the legals or residency conditions, etc.
On the plus side, Australian population is ageing and there will be higher demand for retirement living.
There is no easy answer but I hope this information helps.cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
The Mortgage Manager I deal with was saying ATO is targeting LO DOC borrowers.
cheers,
Sanjiv Gupta“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
