Originally posted by genius
View Post
That is a very good question and I don't think anyone has ever asked that before
The answer is - it depends
To do the strategy I mention in this thread I don't think would be easy or maybe even possible in the Auckland market.
When I was starting out, I did a lot of trading to give me the deposits and used 20% deposits in all the original rentals. The rule with them was I needed an 8% or higher yield to make it work on a maximum of a 25 year loan.
I think you may struggle to get even an 8% yield there now?
If that was the case I would be looking at other areas and depending on how serious I was, maybe even move to an area where it made more sense to buy in. There would be no point in buying rentals at 3 - 6% yield and having to top up mortgages or be putting in 40% + deposits to make the cash flow breakeven or positive.
So, I guess for me the answer would be - I wouldn't be doing it at all there.
Comment