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Otahuhu good start for a 27 year old
I am 27 years old a first home buyer. Currently i am flatting paying $160 a week. I found a small 2 bed rooms unit with bathroom and toilets separated, the asking price is $280,000. My intention is to rent out the unit for $270-290 and stay where i am at the moment. I will be putting down $45,000 deposit.
My question: Otahuhu is a good start? Will it be a hot area in the next 5 years?
If you paid the 280K and put in 45K that means a mortgage of 235K.
at 5% interest only, interest is $11750
Other overheads (rates, insurance, water, maintenance) say $2750
Total estimated outgoings $14500
Rent at $290 for 50 weeks a year = $14500 so you are predicted to break even in cashflow terms.
By paying a bit less that 280K - say 265K - this would improve slightly.
The jury is out on property appreciation in South Auckland.
Some say that with the dismal economic outlook we could get a slow decline in both rents and capital values in the South Auckland area.
My own belief is that the strong rise in prices in other parts in Auckland must eventually flow through to Otahuhu/Manurewa. If all other parts of Auckland are selling for 500K+ then it must affect the south.
You make your choice and back your hunch either way.
What do you think and why?
Originally Posted by Evnesty
Flyernzl, Thank you for your figures. The rates is around $1,300. I have no clue on insurance and maintenance. My intention if i do get this unit is holding it for 5-10 years.
I can really bump up the deposit to $55,000 but i would like wee bit of a emergency money, hence why i stick with 45k
I say do it if you think the capital value in Otahuhu will grow.
If you don't think so - find something better.
With a $45000 deposit you should be able to get a better cashflow property.
I would advise you to keep a buffer in the bank for unexpected costs and vacancies.
Sorry i don't have 450k i only have 45k for a deposit. I am a first home buyer. Does anyone have a spreadsheet i can input the figures into? My plan is to buy a house rent it out until i can afford to move in i will rent it out. Doing the maths i need to come up with $117.50 to service the mortgage. But on the good side i can expect capital gains and after 25 years i will have a free hold house under my name.
Otahuhu has in its favor that it is the closest to the city of the suburbs of Sth Auckland - this must be a factor?
Originally Posted by BigRedDog
1/2 way ish between CBD and Manukau.
Miles better than Manurewa surely?
(I'm a central only guy though)
Looks like we are typing at the same time
Good on ya for keeping a $10,000 buffer.
Perhaps you meant to type either: Interest 11,750 pa or mortgage 317 pw?
Originally Posted by Evnesty
If you are budgeting on 5% interest, I would increase that as a buffer.
Fixed interest rate of 5.99 for 5 years. Weekly mortgage payment will be $347.50
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