I have a question about how people are able to purchase smaller properties without being hurt so much by rates etc.
I have found that many places that I am interested in purchasing… places say around 60 – 100k still have pretty high rates. In doing most of my calculations I have found that any profits I would be getting are getting eaten away by these rates. Where as if I purchase a property above 100k the profit margin against the rates is better so it seems more worthwhile.
I would love to be able to buy a lot of smaller properties under 100k. If anyone has any suggestions as to how people are able to buy so many of these small properties I would love to hear.
Thanks,
Waz11
Are you talking about Land tax, body corporate or council rates?
‘Eat rich food, barbeque a yuppie’ [greedy]
hi,
I am talking about council rates and water etc. I am mainly interested in houses, so no body corporate fees would come into effect.
I just cant see how people can buy thexe little places and still make a profit because from what I have seen the council/water rates seem to be almost similar to the more expensive places that would bring in a bit more rent.
I am really sorry if I have confused anyone [confused2]
Maybe someone could put some figures down for me? say on a 80k property, 7% interest etc..
Thanks,
Waz11
Hi Waz 11
you have raised a very interesting point, the cheaper properties have about the same fixed costs as the more expensive ones.
Rates, insurance , mainenance is about the same on a 80k home as on a 160k home.that is why you are better to buy one more expensive home that is yeilding the same return as 2 cheaper homes.
Also all your cost are double as far as replacing hot water systems, carpet, stoves painting etc.
However, in reality it is harder to buy more expensive homes that will yeild the same as the cheaper ones, that is why i buy exclusively in the cheaper end of the market.
One other thing waz 11, as far a capital growth goes the commonly held view is that higher priced properties will show more capital growth. this has not been my experience, what i’ve seen in the markets in Victoria , south Aust and NZ over the past 2 years where $100k properties have risen by $30K, the bottom of the market has risen by the same amount. so where a 100k property is now worth 130k, Two 50k properties are now worth 80k each or 160k so you are ahead that way.
rgerads westan
I find +ve cashflow deals in New Zealand which I sell to other investors. To be on my database send an e-mail to [email protected]
You must be logged in to reply to this topic. If you don't have an account, you can register here.
