All Topics / General Property / What do you think

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  • Profile photo of comdomcomdom
    Participant
    @comdom
    Join Date: 2003
    Post Count: 92

    Property bought for $170000 repayments $940 monthly IO
    18 months later valued at $265000

    equity obtained $40000
    Loan $210000 Repayments $1140 monthly IO up $200

    Purchase IP for $40000 pls cost $46000 Loan repayment on $6000 $54 a month
    Rent for $100 per week $8 management fee rates $75 a month maintanence $41 per month + insurance $16 per month

    monthly return $400 – monthly costs $314 = $86 profit per month

    This would not cover the $200 repayments after you have refinanced .
    Am i wrong or is their a better strategy?

    Profile photo of westanwestan
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    @westan
    Join Date: 2002
    Post Count: 1,950

    sorry comdom

    what’s the question ?
    are you asking if a property bought for 40k that rents for 100pw is cash positve then most likely not.

    westan

    Profile photo of comdomcomdom
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    @comdom
    Join Date: 2003
    Post Count: 92

    Westan,
    The question is what is the advantage in accessing your equity from the Ip to buy more Ips if they dont become cash positive.

    Profile photo of comdomcomdom
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    @comdom
    Join Date: 2003
    Post Count: 92

    Has anybody else a strategy for this?[;)]

    Profile photo of westanwestan
    Member
    @westan
    Join Date: 2002
    Post Count: 1,950

    hi comdom

    as a general rule i’d never buy something that wasn’t cash positive (unless there was some fantastic twist to the property like a subdivision). i’ve bought a few properties (sold some) over the past 6 yrs and all of them were cash positive.
    $40k for 100pw will stuggle to be cash positive, unless you put some of your own money into the deal, say 20%
    regards westan

    Profile photo of comdomcomdom
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    @comdom
    Join Date: 2003
    Post Count: 92

    Thanks westan,

    Yes the $40K is the cash deposit, and the price of the house. So total $46K and their would only be 6K owing on the property but even so refinancing in this situation would not benifit you at all as a cash positive investment.
    Dom[;)]

    Profile photo of comdomcomdom
    Participant
    @comdom
    Join Date: 2003
    Post Count: 92

    Thanks westan,

    Yes the $40K is the cash deposit, and the price of the house. So total $46K and their would only be 6K owing on the property but even so refinancing in this situation would not benifit you at all as a cash positive investment.
    Dom

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