block of 6 units in country town of 3500, two rented @ $85pw and 4 @ $75, one of which will become vacant at end of month all for $170,000. Most have been tenants for several years. Did a check with the Shire and found the rates were $2278pa. Allowing for water to be approx the same I did calculations on EZ rent and came up with a negative cash flow of over $2000pa. Am I doing something wrong here? Advice would be very welcome.
Hi Judith,
I just used ez-rent with your numbers quickly and and come up with 8k+ cash flow after cash. When it’s saying annual loss in negative it mean that +ve cash flow. Please try to put numbers again. I think it’s good deal.
Cheers
AmitI did a quick calcs and assuming all 6 units are
for sale for 170K they are 16K a year positive
pre-tax and 13K positive after tax at 30% tax braket – 14.0% gross yield and 10.2 net yield.Because it is a 6 units the bank will consider
it a comercial property and will probably only
land 60-70% of the total value.Stan
Thanks guys. I was sure I had the numbers wrong but as this is my first purchase of more than a single dwelling and in an area that I cannot keep watch on I am a little nervous. Yesterday’s good news. Found out that the reno I am currently in the middle of is to be rezoned within a year effectively making it a four unit site. I’ll patch up, find a tenant and sit tight.
Hi Judith
That deal sounds familiar, is it in SA? I might have info for you if it is the same deal.
Cheers
Leigh K[
]Read, learn, grow but most of all do it.
Hi Leigh, No it is Wheatbelt W.A.
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