O.K I’m going to take the big step and put an offer in for a 2 bedroom home in Roma Qld. $55,000 with rent at $110,00 a week. This is my first investment does it sound like a good idea.[
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Thanks LisaLISA MARKS
What do you want from your investment? Thats what I would focus on. You need to look at more than the numbers.
Here are the numbers as I see them.
Rent $5720
Interest $55k at 7.07% $3888
Rates (guess) $400
Water (guess) $200
Agents Comm at 7% $400
Net $832Thats not allowing for any repairs or increase in interest rates either.
Other considerations.
1. Where is Roma, how far from Brisbane is it?
2. How large is the block?
3. What is the history of capital growth in the area?
4. What was the place worth say 3 years ago?
5. What is the general state of the outside?
6. How is the general area like?
7. What type of renters will you get? Single parents on social security.
8. How much effort will there be for you just to get a return of $832.
9. What do you think the place will be worth in 5 years time.
10. Is this a population growth area?Anyway, just my two cents worth. If this is a rural area. I would not proceed as I only invest near where I live and I invest for capital growth.
If you expect the place to be worth double in 7 years, then I would proceed. If not $800 does not allow me to sleep at night if i have to borrow $50k and the place is hours drive from where I live.
Coincidentally, I think this is the same property as I have enquired about a little while ago.
Rates are more like $1500 p/a
Do you realise it is a reno and you need to spend at least $10,000 on it?Jack’s advice is great do your research based on the suggestions he gave. If the numbers still work for you, and you’re happy with the research results, then you can feel at peace when you make your offer.
Good luck!
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