One thing to point out. It wouldn’t be advisable to use an IO loan for positive cash flow property. A better strategy would be to use the rent to pay down the principle as soon as possible. This will not only increase your equity in your property but will lower your interest expense and hence increase your cash flow.

Andrew

http://www.realestate.com.au/property-unit-qld-cairns+north-116210671

Price: $100,000 NEG
Rent: $185 (based on similar unit: http://www.realestate.com.au/property-unit-qld-cairns+north-412264451)
Yield: 9.62%

Hey Ben

Just a quick tip. There two different different calculation:

1. Income(cash flow) = (Revenue – Expenses)
2. Taxable income = (Revenue – Deductions)

eg. Depreciation is a deduction but it’s not an expense.

I think this is what is confusing you maybe.

No worries Ben.

The best thing to do is to read as much as you can and talk to people and ask questions. And over time, without noticing it, you will get better. You’re on the right track.

The best thing to do as a starting investor, who is ready to invest, is to dip your feet in the pool before you jump in it. No matter how many books you read…[Read more]

Here is a quick summary:

Price: $250,000
Loan Amount: $200,000 (80%)
Cash: $50,000
Loan Payments (P+I): $257 per week (@ 5.3% interest for 30 years)
Rent: $290 (as per your assumption including expenses etc)

Cash Flow: $290 – $257 = $33 (This amount can also be contributed towards the mortgage payments)

If the investor wants to spend this money…[Read more]

Yes.

You are entitled to a tax refund if your taxable income is negative (taxable loss). The amount of the refund is a fraction (tax rate) of the taxable loss.

Try to understand how to calculate your taxable income.

Income – deductions = taxable income

Deductions = interest, depreciation, deductible expenses, etc

If your taxable income is…[Read more]

http://www.realestate.com.au/property-house-qld-roma-112832615

Price: $190,000
Rent: $300 p.w. (currently rented)

Hi Pat

have a look at a thread I started where I list positive cash flow properties that are currently for sale.

https://www.propertyinvesting.com/topic/4989954-positive-cash-flow-properties-real-world-examples/

This is not correct. Depending on the investors situation, but in general Interest Only loans should be used when negative gearing…[Read more]

Don’t purchase this property. Look for a property that has:

Weekly rent >= Price/1000 (at current interest rates)

In your case if your property ($750,000) doesn’t rent for $750 p.w. then I wouldn’t go near it (there are exceptions of course but $400 p.w. is too low).

So to answer your questions. Personally:

1. I wouldn’t buy in Melbourne in…[Read more]

I am referring to residential property. Most investors on this forum (especially starting ones) focus on residential property.

Commercial property is a whole different market that is affected by different factors. Loans on commercial properties are harder to get, have stricter requirements, have higher interest rates and only lend up to 60%.…[Read more]

Did you try http://onthehouse.com.au/ or http://house.ksou.cn/? They are both free but don’t have all properties.

That is true. Interest rates will go up and down all the time. But at least in Australia the banks will lend you money. In the US you will have to use your cash. So what you are doing is essentially paying off US debt with AUS cash.

I think I mentioned this before on this thread so am repeating myself here. There is a reason why US banks don’t…[Read more]

Hi Belinda

Thank you for the compliment. I am happy that you love reading them.

Finding positive cash flow properties is not that easy and even after you have found them further research is needed to find out why they are positive cash flow before you commit to purchasing them. It’s quite time consuming and requires you to keep up with property…[Read more]

Yes it is payable. You own the land together with the other owners in the building. The amount will be apportioned according to your share. There are 2 option it could be apportioned:

1. Land Value / number of units in the building
2. Land Value * (your unit size in sqm / total units sqm)

Body Rates could vary a lot between Units. A unit with no lift/pool/etc could have a body corp of <$2000. A new one with lift/pool/gym/etc could have a body corp of $5000.

The body corp is there to maintain these facilities. Some older buildings might require more maintenance and hence a higher body corp. It’s better to just ask the agent.

But…[Read more]

Hi startofinish

I included a 1 bedroom unit that’s in the Brisbane CBD.

Did you include body corp in your calc?

Agree with Jamie.

For personal usu it won’t be deductible.

For investment it will be.