We are going to be renting out our existing PPoR once our new home is completed in July. The figures are as follows
Total debt owing – $384,000
Valuation as at Dec 07 – $435,000
Rental Valuation – $420 per week
Expected growth for Suburb – 13% for annumLoads of new infrastructure coming soon – hospital (3000 jobs), shopping centre, commercial/business centres, restaurants/cafes all within 5 minute drive as well as 5 minutes from Bruce Highway to Brisbane, 30 minutes from Noosa/Hastings St, 2 minutes to beaches.
What are your thoughts on this??? My out of pocket expenses are about $250 per week BEFORE tax/depreciation and this is assuming 48wk tenancy and 8% management fees from rental agent/rates/insurance etc.
Um, $250 per week means you've got about 3% interest on your mortgage!!!
Hang on – I think you must mean cashflow negative by $250 per week, right? So rent $420 per week, expenses $670 pw? That sounds more like it! Well, that means about $13K negative per year, and if it grows at even a conservative 8%pa, it will increase in value by about $35K in the first year. So provided you can afford the negative cashflow, it sure sounds like a keeper to me!
Best wishes, Tracey in Brisbane
Hi Anthony,
You should take Depreciation into consideration as well for cashflow purpose.
Also, consider Interest Only loan to reduce your repayments (if the loan is not already Interest Only).
Other than that, I think its a good investment and you should hang onto it.
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