Hi everyone,
I have just been searching the internet for about 5 hours now and I have come across 2 positive cashflow property's at 8% and 8.5% yield, so they are starting to pop up again.
Good stuff Dr Spock, remember to factor in maintenance/repair costs (around 20% rent for older properties), rates, water and insurance. Also if you finance at around 8%, not much room there for cash to flow your way.
Happy Investing
At 8.5% I would think that the only way it could be pos is AFTER TAX, given that finance is nudging 8% in most cases now.
I have recently settled on one in Qld. Price $257K leased to a corporate client at $450 per week. They certainly are around.
Cheers
TammyIf you wrap the propert from day 1 you are getting COC return of around 16%.
Combine these strategies with the traditional buy and hold for capital growth and you are doing very nicely.
Richard Taylor | Australia's leading private lender
Qlds007 wrote:If you wrap the propert from day 1 you are getting COC return of around 16%.What sale % margin and % interest rate higher do you use to achieve this??
Cheers,
Christhey are out there .. settlin one at 364 .. renting at 700pw
Chris
Usually 20-28% markup on the original price and current interest rate of around 10.25%.
Richard Taylor | Australia's leading private lender
Richard, would a wrap like the one that you talk about be a good venture for a first timer in the property market??
Coz a CoC return(of 16%) requires a certain % of deposit(so what LVR do you go for??)
I'm going to buy a property in late 2009(first one) with a deposit between 25-28K, the property im looking for is around 200K with 5% closing costs factored in my loan amount will be(assuming 25K dep) around 187K (LVR be around 93.5), so with the margin it would be a sale price of lets say 250K.
Expenses with wraps, I would usually say with the buy-hold method that we should factor 15-20% but what % of expenses will be for a wrap??
Chris.
CHris
Remember with a wrap the wrappee pays you a deposit straight up front and in most States you also assign their FHOG which can between $7000 – $10000 which helps with your deposit.
Richard Taylor | Australia's leading private lender
I saw a commercial property the other day leased for a 7.5% net return. It looked great until you realise that the rent paid is unsustainable – they were paying 20-30% above Sydney Industrial prices for B grade property for a D Grade industrial building near God only knows (probably 60% above comparables).
tammy and rob, are they commercial properties?
houses, units, land, shops???vyaw2003 – it is a 3 bedroom house.
Tammy
had the same question as vyaw2003…. ie.. commercial or residential?
Sounds like a mining town. Maybe Bowen Basin or Surat Basin? Residential IP most probably.
If so, maybe a bit hard to wrap because the customer base (tenants) are not that interested in buying, often are mining companies. On the other hand, other characteristics are good because these people are often high income earners. Average household income in some of these towns is 140k+ pa! Makes 450/pw rent look cheap!
Daedalus.
It is a residential dwelling, yes leased to a mining associated company. Long term leasees who will be there for a while yet. Also purchased a vacent block zoned multi dwelling which I will develop and hope to put back on the market with a 6% or better yield (depends on final build price). This should be attractive enough for investors as it also has the depreciation.
Cheers
TNice.
Just bought one for myself at 8.5% yield with subdivision potential so it is still a usefull strategy imo
Don Nicolussi | Mortgage Broker - Home Loan Warehouse
http://homeloanwarehouse.com.au
Email Me | Phone Me"I think of finance as a technology, a way of getting things done." Robert Shiller
vyaw2003 – 4 Bed House & 2 Bed SC Unit .. single title
Very nice
add me on msn would love to chat with you
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