[SamblersMember@samblersJoin Date: 2009Post Count: 12]

June 2, 2009 - 6:27 am

Are you referring to the several apartments which are within managed buildings? Like the Quest ones, for example? Or company shares?

During my (short) time reading around, I understand than some investors avoid these… which makes me avoid them… which makes them more difficult to sell.

Discussed this with a REA at the weekend and he said they were difficult to sell also

[SamblersMember@samblersJoin Date: 2009Post Count: 12]

May 30, 2009 - 10:52 am

Cheers Scott

Just spent today trawling round home opens around the $250-$350K mark for units… was not impressed. Highest Net Yield i’ve found after costs so far is 4.3% and the strata fees i’m talking about are largely responsible… several of the units had strata fees alone of $2K+/yr.

Wow.

I was just wondering if anyone had done any sums on the comparative ratio of rent vs. costs for different types of properties and whether this favoured, for example, 2bdr villas rather than units?

Current worst example is over 30% of rental yield disappears on costs.

Cheers, Sam

[SamblersMember@samblersJoin Date: 2009Post Count: 12]

May 27, 2009 - 2:36 am

Hi Tony

Yes that’s my belief also, despite my never having rented property in Australia (I used to rent in the UK). I also have a belief that quality property will attract quality tenants, and that if you enter th market at the very lowest/grotty end, then you can expect likewise from tenants.

So, smaller blocks, near the action but away from ‘unit-land’. Hmm…. also 2 bedrooms better than 1. OK, but I guess that means i’m digging for more cash

The challenge really seems to be finding something that is CF neutral (becoming positive). Working on a current interest rate of 5.84% fixed for the first 3 years, I calculate that I’ll need to find something that has a Gross Yield of 8.4%…. difficult in Perth. Typical is around 4-5.

Time to get looking…

[SamblersMember@samblersJoin Date: 2009Post Count: 12]

May 27, 2009 - 2:27 am

Thanks

[SamblersMember@samblersJoin Date: 2009Post Count: 12]

May 26, 2009 - 11:46 pm

Thanks guys

I have been advised that the way to proceed is to leave the deposit money where it is and buy the IP with 100% loan – take a loan for 80% of the IP with a new lender and get the balance 20% with our current bank, secured against our PPoR.

This makes sense to me…. what about to you?

My wife earns more than me and pays more tax than me, so we think it would be better to put the property in her name?

Cheers, Sam

[SamblersMember@samblersJoin Date: 2009Post Count: 12]

May 26, 2009 - 3:11 am

Thanks Karen… hadn’t thought of it like that – we have Super all over the place and pensions in the UK which need bringing over so maybe it might be a good time to get a financial ‘health check’ from someone in the know.

I also just phoned my mortgage broker and even he educated me in the short time we spoke… basically it sounds like i’d be better keeping my $50K offset against my PPoR and get a 100% loan against the IP. Seems so simple now, tsch!

More thoughts welcome…

[SamblersMember@samblersJoin Date: 2009Post Count: 12]

May 26, 2009 - 12:05 am

Interesting post, and some good advice Tony.

So, assuming 1 bedroom apartments are the safer bet (I am currently thinking of the same), what other purchase criteria would you be looking for?

– bigger blocks of units versus smaller blocks?
– off the plan versus 1960’s?

There are a few places in Perth (for eg) where most of the 1bd units are grouped along a single road (its ‘unit-land’)… is this a good thing or a bad thing for investment? Conversely, will it be difficult to rent a unit that is in a largely residential area of homes which are owner-occupied?

Cheers, Sam

[SamblersMember@samblersJoin Date: 2009Post Count: 12]

May 25, 2009 - 1:23 pm

OK cool… leverage. So is that good leverage then?

I’m investing $50K and the return is $13K (26%- sounds great)…. but then for the first 5 years i’ll be CF-.

I understand that i’ll need to be in it for the long term

Cheers

[SamblersMember@samblersJoin Date: 2009Post Count: 12]

May 25, 2009 - 12:47 pm

Oh, and feel free to recommend alternative city-fringe suburbs in Perth if you think they have better potential!

Thanks