kyles73Member@kyles73Join Date: 2003Post Count: 1
Seeking advice here…….
Myself and my partner are newbies at investing and about to go for our first investment property. Unfortunately the numbers are beating us around the head a bit when deciding what to go for as neither of us are sure how to go about determining whether it is a good deal or not.
Are there any calculations that can help decide whether a property is more likely to be better long term with rental yields etc???
The situations are;
2 br flat @ $75,000 renting for $110 a week.
Rates are $1,200 yr and body corporate is $1,000 yr
3 br detached unit with yard @ $105,000 renting for $130 a week.
Rates are $1,200 and body corporate is $880 yr
both of us are low-ish income earners so we want to make sure that our repayments are not too high.
help!! The DIY Dog WashMember@the-diy-dog-washJoin Date: 2003Post Count: 696
Hi Scotty & Kyles
Welcome to PropertyInvesting.com – home of positive cashflow real estate investing.
For my two cents, I understand what you mean about the numbers they are enough to make you feel like a high school drop out … stupid part is I can remember the lesson on yields and returns and clearly remember saying I don’t intend to go into any field dealing with this stuff.[V]
BUT, now I know a lot about them I am actually impressed that I can calculate most bits of info on the fly these days.
Just a real quick glance over your figures show that both are negative geared … meaning that if you are already on low incomes both of these deals will see you with less income each month. That’s for you to decide if you can live with less. Personally I would think that if you’re on a low income then you would be wanting to add to your income instead of take away. Well that is the type of investing that most of us do around here – low income or not.
Back to the numbers my advice is to not buy either property until you do understand the numbers. It might mean you have to wait 2 or 3 months but you are responsible for your deals make sure you know how they work.
Good luck to you guys and I look forward to more of your posts.
BTW, do a search and you will find loads of info about calculating returns and yeilds etc.
Carve your own path and lead the way …Elysium-MMember@elysium-mJoin Date: 2003Post Count: 259
A great little program that could help you crunch the numbers is EZ-Rent.
Go to http://www.ez-rent.com to download the free program (last I checked it was free).
It shouldn’t be the only tool in your toolbox for evaluating properties, but I’ve found it helpful for my purchases.
Elysium-MPhil_2Member@phil_2Join Date: 2004Post Count: 45
Just a thought on the types of properties your looking at. My wife & I bought 1 of a triplex last year. The strata title had the body corporate stuff written out. So even though it’s in a group it’s treated like an independent(freehold) house. The only thing to watch out for is would that work in the units your looking at? We have only 3 detached houses with almost no common area. If its a large group this is hard to do because there’s usually lots more common property (owned by all tennents). All I’m saying is to look for situations where there is no body corporate stuff.
Finally, we are both low income earners too don’t let this stop you[^]
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