Hi all,
I’m young and new to this game. I’m curious to know what is the minimum % return on an IP that you would consider? [withstupid]
Micsha,
I think it depends on what your investment strategy is. I am currently investing for high short term capital gains in the booming WA property market so I’m happy with my current returns of 4.3% and 3.7%. As I’m also in a high tax bracket, I get significant tax offsets which keeps the cash holding costs low despite the low yield. On a longer term buy and hold strategy with long term steady CG’s I’d be looking for at least 5% initially with a view to steadily growing the rent through natural indexation and value adding. A CF+ investor would probably not accept anything below 7.5%.
Flatout
Personally I wouldn’t look at anything below 7.8% gross yield, although now I’m having to recalculate with the rate rise. As previously stated it all comes back to you and your strategy.
What do you want your investments to do for you?
Stuart Milne
Non-Conforming Specialist
READY Mortgages
http://www.readymortgages.com.au
[email protected]
Mob: 0404 056 05510% unless the property looks like it is going to make me capital gains in the very near future
We buy properties cash fast settlements no fees no fuss. contact me on 0408 355568
[email protected]Hi Mischa
i would only buy properties that were showing at least 14% gross returns.
I really would only invest for a net return of 20% (Return on cash).
Some stategies i’m pursueing are even better than 20%.
I need to get cashflow as i’m living off my investmment dollars so cashflow is very important, but not the only factor i really expect to make capital gains as well, so i’d buy in areas that i expect will appreciate.
I know what i’m saying wont make much sense to you as they aren’t possible in any market in australia that i’m aware of. You need to look overseas.
regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auWestan you say you cant get these returns in Australia.
I just bought a property in the la trobe vally for 75K spent 3 weeks cleaning it up and replacing the kitchen owed me 100k includeing all costs and sold it for 140k cash on cash was about 100% in a period of 3 monthsWe buy properties cash fast settlements no fees no fuss. contact me on 0408 355568
[email protected]Hi Rikky
well done thats great.
what i meant was hard to do in Oz was buy properties showing gross 14%. With capital growth potential.
i don’t doubt there are still people making money in real estate in Australia, its just very hard if you want to buy and hold.
regards westan
USA deals, cash flow equity and capital growth all in one property.
International Property Consulting Pty/Ltd.
Property Investing New Zealand Ltd
http://www.iproperty.net.auhi mischa
you are asking a question that does not have an answer as the return is worked out if you are holding or you are selling.
my money in against money out is alot more then 100% but thats because of the structure to construct.
If you are looking at return on a project that is a hold the it depends on the growth that you are looking at for that area.
be very carefull when looking at return you can have a high cash flow return but not growth or high growth but not cash flow if some says they have both check the figure.its is hard to find property that is doing more then 20%
sorry not true most developments have a built in 21% profit margin or don’t do the development.
you can look overseas and I’m am currently doing that with the china project and the returns on that project are 100% plus return over 24 months and my money stays here but there are still very good money to made here
its what you are comfortable with .
it also depends on your risk management factor.
and Rikky not sure if my way of looking at margin is different to yours but 75 in plus 25 and the 140 out is not 100% for me its 40% 100 in 140 out is 40%
for me its 15 in( bank 80%) me 5( reno) bank the rest total me 20 bank 80 sell 140 me 200% on my cash in( thats with out cgt etc but using your figures).
and here is how I would really do it.
3.75k in(5%) delayed settlement with access.
all contractors get 10% upfront but wait until project is sold.
reno done and revalued 140k
lend 80% on 140k = 112k
give the owners the 71.25k and the contractors the 22.5 plus the 10% totals 100k and you have 12k tax free and the house
and you haven’t sold it.
and you have got not 200% nearly 300% and still the house.
after you have revalued and you then sell do you care you got your 300% profit and if you get another 1k your happy as you have already made your money.
lots of ways of cracking that egg.
I borrow the max and then leverage off that max level
so if I can get 100k out of project with no money in I’m happy but oh back to the tread
whats the return.
if you put no money in put get 100k profit, equity or cash out whats the return.investing outside of Australia is good but understand why, who and what you are investing in,you can find lots of investments with in australia that are just as good as overseas and in some cases better but it depend if you want to diversify which I do hence my move off shore I will do on most of my sites here more of a return money in money out then any us or bulgaria deal.
china no
as its no money in, no money out, and a 110% profit over 24 months plus holding the property and growth is unknown.
all with the use of equity lending on cash deposits.
This type of investing and the returns are not available here.
so in answer to your question returns are very hard to explainhere to help
If you want to get involved in some of the projects I’m involved in email to [email protected]
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