Hi everyone,
Just a little background, I am *extremely* new to investing, I’m a student, never owned a property, not even currently employed, but am going to be in the near future. I am over half way through Steve McKnight’s book (0-260 properties…) and am finding it great as a newbies guide.
Right now I am trying to get some experience playing “pretend-investor” (checking out property prices, and figuring out the cash flow income after all payments have been made each month and annually.)
So my question is, hypothetically/made-up, say I found a unit in a small-town for $95000, renting at $325 per week, straight off the bat I know that the yield is 17%. Now I’ve been reading the forums here, and that seems too good to be true. Am I miscalculating here?
All I want is a spreadsheet or formula I can punch in the full price, rental income, rates and other charges, and to be given a final number indicating if the investment would be + or –
Can anyone help?
Sure, send me an email and I'll send you the spreadsheet I give to my clients.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Sounds like a good deal to me, let me when you find it, I want one too!
OK, for future reference, what is the next step if I have found a property with a good rental yield?
I imagine I would call up the RE agent and ask for proof of rent (to make sure the quoted rent price is legitimate) and tenancy records for the past 12-36 months, can I do that?
(By records I just mean when it was tenanted during the period, not their personal info!)And question #2:
If you could show a bank, on paper, that you have found a rental property to buy which has a high rental yield as well as a high tenancy rate, and that the rental income is greater than the mortgage payments, would they be keener to approve a mortgage for you?Radicals wrote:OK, for future reference, what is the next step if I have found a property with a good rental yield? I imagine I would call up the RE agent and ask for proof of rent (to make sure the quoted rent price is legitimate) and tenancy records for the past 12-36 months, can I do that? (By records I just mean when it was tenanted during the period, not their personal info!)You could get at idea of how much similar properties within the area are renting for by checking out http://www.realestate.com.au/rent
Radicals wrote:And question #2: If you could show a bank, on paper, that you have found a rental property to buy which has a high rental yield as well as a high tenancy rate, and that the rental income is greater than the mortgage payments, would they be keener to approve a mortgage for you?It can help – but lenders generally don't factor in 100% of the rent received due to the costs associated with holding an IP (the amount taken into consideration varies between lenders but 75%-80% of the rent is not uncommon). Also, there are other factors in play when determining whether you'll be approved for the loan.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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