Hi,

Yield is a fancy return for return.

In property investing there are two yields that most people watch:

1. Capital Gains Yield:

Annual Capital Gain / (Purchase Price + Closing Costs)

2. Cashflow Yield

Annual Cashflow / (Purchase Price + Closing Costs)

These figures, when combined, give you the ROI (Return on your investment).

Me, I…[Read more]

OK.

My initial thoughts…

Monthly rent = $1107
Weekly rent = $255.66
11 Sec. Solution = (255.66/2)*1000 = $127,829
Sales price = $159,000

Outside parameters.

BUT

1. Can you increase the current rent (ie. sublet areas, value add etc)?
2. Can you negotiate a lower purchase price?
3. What guarantee do you have that the tenant will renew?
4.…[Read more]

Ah, nope, not quite.

Vacancies refers to the length of time that you allow your property to be without a tenant each year.

Initially if it is vacant it is the time you expect it will take to attract a new tenant.

Then, in later years, the time that it will vacant in between one tenant moving out and another tenant moving in.

Personally, I…[Read more]

Nathan,

I am an advocate of both wraps and lease options in the right circumstance.

The difference b/w the two techniques is that with a wrap the is actually a contract to buy the property… in a lease option there is only a right to buy, rather than an obligation to buy.

The different nature of the contract creates the advantages and…[Read more]

Well said Paul.. that is exactly what I was talking about.

[]

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Hi again,

I doubt that your friend is / will rip you off… but it’s likely to be a good way to start his project to have you sign on (from his perspective) since he will need some pre-sales for both his marketing and also to get financing for the project.

Tread carefully and don’t let friendship or greed (or hype) get in the way of cold are…[Read more]

Hi Ireena,

Thanks for your post and welcome to the PropertyInvesting.com community.

In respect to general things to look our for, I’d strongly recommend you read my 10 Laws of property investing success that have been outlined in editions of Insider to date (the monthly newsletter).

Specifically though, you raise a good topic of converstaion…[Read more]

Hi Nathan,

I had a quick look over your numbers.

I think it highlights well how one property might just cross the line under one strategy but be a good +ve cashflow spinner under another.

Some things to think about:

1. Did you allow for vacancies in the B&H figures?
2. Did you allow for rental management in the B&H figures? At what %?
3. The…[Read more]

Hi Angie,

You ask:

quote:
I was wondering if I found my own tenant (ie. the real estate didn’t find it for me) do I still have to pay the one month letting fee still to the agent as stated in the contract? If not, then I could give that to the good tenant as an incentive to stay and bring in her friends….
(thanks Steve)

I wouldn’t imagine…[Read more]

Hi,

Try Mike Kelly’s site:

http://www.positivecashflow.com.au/the_tools.php?catPath=25

Cheers,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Angie,

Bring on the problems!

If it were me I’d immediately sack the rental manager and also look to terminate the lease of the rowdy young adults (for breach of lease).

Then I’d go back to the good tenant and ask her for the names of any people she might know who might be interested in renting the units. Offer her one month’s rent free for…[Read more]

Hi,

I don’t expect that you’ll be easily able to find a conventional property within 1 hr of Sydney that’ll meet thet 11 sec solution.

So what does this mean?

Well, you either change the way you are looking or the questions that you are asking… or alternatively look to invest in a different area.

I feel that the equation remains as valid…[Read more]

My ultimate money goal:

Acquire ownership of a generous source of income that flows to me regardless of any job.

Execution

1. Minimise personal debt

2. Create an independent investment pool of $500 per month that sits for emergencies and earns a minimum of 5% per annum

3. Invest in property in such a way as it immediately returns a positive…[Read more]

Hi Chara,

What help / feedback do you feel you need?

For what it is worth… all housing commission sales that I have known about go to public auction first.

That does not mean you can’t try to approach the powers that be and work around the system… it just might need a little netwroking on your part first.

Regards,

Steve…[Read more]

Gillian,

I’d work out some budget numbers that start with how much money you plan to make and then work backwards.

This will reveal the amount of cash you can spend to acquire the home to begin with.

Avoid, at all costs, being swept up with the potential to make a lot of money.

Look at what is happening around the area where you want to invest…[Read more]

Whoa!

Hang on a minute… I wouldn’t go so far as to recommend home loan analyser. It is just the software that we used when we started.

We have always pointed out that the purpose of the software is NOT wrap specific, but to calculate the interest component that should be charged.

What we used was HLA to calculate the interest between two…[Read more]

Hi Nathan,

Thanks for your post and welcome to the PropertyInvesting.com community.

In respect of tips for beginning I certainly want to encourage you to continue working on clearing up any past financial glitches.

The essence of successful property investing begins with successful personal finance management.

In this respect I’d spend some…[Read more]

Hi Matt,

By rates, do you mean council rates?

If so, then this extract is taken from a local shire council

quote:Cardinia Shire Council rates are based on the Capital Improved Value of each property.
A rate in the dollar is declared by comparing the total valuation to revenue required. Rates are then apportioned against each property on the…

[Read more]

Hi,

Welcome to the land of Oz!

You ask:

quote:
Does the non paying scenario tend to happen a lot?

Well, in my opinion if it happens once then it happens too often.

As such I take the approach that it is best to carefully pre-qualify the lead before entering into an agreement.

I wouldn’t call the process of getting a defaulter out of a…[Read more]

Hi,

The REIA has this information in percentage form for most areas, but you will have to pay for it.

See:

http://www.reia.com.au/market_reports/Market%20Facts.htm

Bye

Steve McKnight

**********
Remember that success comes from doing things differently.
**********