All Topics / Help Needed! / 1st property Help! Please!

Viewing 9 posts - 1 through 9 (of 9 total)
  • Profile photo of localinvestorlocalinvestor
    Member
    @localinvestor
    Join Date: 2006
    Post Count: 6

    Hi there fellow investorians,

    I need some help please: I am about to put an offer in for my first investment property and have done the research/homework/number crunches but am still new to all of this so just hopeing all your experiences may help me just in case i have missed something:

    -Property is a 36ft caravan with 34ft aluminium annex, bedrooms, good size lounge, small kitchen & dining inc gas stove & fridge, shower cubicle + vanity, seperate toilet, heating & cooling, good sized paved verandah, sarlon shaded carport (parking x2), 2 Garden sheds + more, potential rent $280-$300 per week. for sale $80,000

    – In a mining town where they are lineing up for rentals.

    – Site fees are $79 a week

    – Property managment ?? not sure yet.

    – 20% deposit down

    – 5% purchase costs

    – 2.5% Annual fee

    – so yeild is 18.20% (not including site fee)

    – cash on cash return 35.66% (not including site fee)

    – positive cash flow $137.15

    I used investment detective and jaffasoft to crunch numbers but am wondering are there any hidden costs any1 can think of? the only thing i can see that can go wrong is if maintenance bills get out of hand or management fees are high.

    any help would be very much appreciated!!

    Thanks

    Julius

    Profile photo of marg4000marg4000
    Member
    @marg4000
    Join Date: 2006
    Post Count: 70

    Have you checked out the finance situation? I am no expert, but since you are actually buying a caravan I can’t see that finance would be available at housing rates or conditions regarding the required deposit – 20% may not be sufficient.

    Profile photo of localinvestorlocalinvestor
    Member
    @localinvestor
    Join Date: 2006
    Post Count: 6

    Thanks for the reply,

    That did cross my mind i will have to look into that,do you know roughly what % they would lend on a property like that?

    Profile photo of marg4000marg4000
    Member
    @marg4000
    Join Date: 2006
    Post Count: 70

    Sorry , I would have no idea. Perhaps contact a local bank and ask, most financial institutions would have similar rules. Or check out the bank sites on the web. Also check out the interest rates applicable.
    And at the same time, I recommend you check out the insurance situation to make sure that suitable insurance is available in a rental caravan situation.
    Margaret

    Profile photo of IPSpiritIPSpirit
    Member
    @ipspirit
    Join Date: 2005
    Post Count: 84

    My inlaws are looking at buying a park home, but they were told (by park residents) that you can’t get a mortgage for them, you have to get a personal loan. So whatever the difference in % that is I guess.

    Profile photo of localinvestorlocalinvestor
    Member
    @localinvestor
    Join Date: 2006
    Post Count: 6

    thanks for the info i think you might be right will investigate further tomorow, i’ll let you know how i go for your own knowledge.

    thanks again Marg & Dee Dee very kind of you[thumbsupanim]

    Profile photo of Mortgage HunterMortgage Hunter
    Participant
    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781

    It is neither real estate or a property. You would get a loan similar to a car loan.

    This leasing arrangement is high priced and yields well. But don’t compare it to real estate – it is a whole different ball game. Treat it as a business proposition. In that case it seems expensive to me.

    Good luck

    Simon Macks
    Residential and Commercial Finance Broker
    [email protected]
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of m.pulleym.pulley
    Member
    @m.pulley
    Join Date: 2006
    Post Count: 45

    Hi Julius,

    I am not sure how this works where you are but I have heard of caravan sites in WA will not allow you to rent out the caravans.

    All the best.

    Mark

    Profile photo of lsnlsn
    Member
    @lsn
    Join Date: 2006
    Post Count: 14

    Yes, this would be viewed as a car loan/ lease. There would generally be no property or land that a mortgage could be held over. Even if it could the property would most likely be unsuitable for a lender to take as security as the house could simply be towed away… reducing the value of lenders security.

    Regards
    Colin Kidd
    Loan Saver Network
    http://www.loansaver.com.au
    When the Banks say “no”. We say GO!
    m: 0404 362 262

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