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  • Property Deal

    Hi all,I was just wondering what you guys thought of this deal. I am looking to start investing and due to not having much room to move repayments wise have to start low and look for cash flow.2 x 30sqm units in small North Island town, both rented to retired people for 12 and 14 years (if they live that long!), rent is currently $90 per week each. Asking price is 40K for each. Rates are $256 per quarter and BC is $15 per week for each. Aparently not too much of a hassle to manage long distance as there is a property manager for the complex, if repairs are needed I can just phone him and pay the invoice.All comments welcome for a timid newbie

  • #2
    Being 30sqm not sure how easy it would be to get finance especially for over 50%.
    If mortgaged at 80% they are negative cashflow anyway. What is the capital growth like there, if it is below average the deal may not be worth it.
    Last edited by Tucker; 27-11-2007, 12:52 PM.
    Nigel Turner

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    • #3
      Capital growth is not good, hence the low price, units are in Kawerau. I don't know too much about the area apart from some recent research which was not encouraging. First google search came up with mongrel mob articles lol

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      • #4
        Hey GG

        How does this deal fit in with your strategy? Are you 'Buy and Holding' or Trading? What do you want to achieve? Tell us a little more about yourself :-) Don't be scared - we don't bite... do we Xris...

        L

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        • #5
          Originally posted by Snookie View Post
          Hey GG

          How does this deal fit in with your strategy? Are you 'Buy and Holding' or Trading? What do you want to achieve? Tell us a little more about yourself :-) Don't be scared - we don't bite... do we Xris...

          L
          I will try not to be scared. I have my own apartment in Wellington, CV of 265K and mortgage of 165K. I am looking to invest so hopefully I won't need to work for anyone but myself. Only on 43K at the moment which means the banks won't let me borrow much more then $170K. My partner when she graduates in 2 - 3 years will definently help income wise, but at this stage what can or should I do?After much reading I think the best way (and only way at this stage) is to purchase some primarily cash flow properties and then a property mainly for capital growth for which the payments can be mainly satisfied by the rent it gets and the cashflow properties rent.

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          • #6
            Educate Yourself

            Sounds like you have a vision which is GREAT! Continuing to educate yourself on PT (and through various other sources) is the best way to go.

            You should come along to the Wellington PT Xmas Party next Thursday for a start...

            At the moment cashflow positive is very hard to come by (but not impossible). A few of us are trading properties - so we can pay down our mortgages and get positive cashflow that way. You have to be very careful with both strategies in the present market and talk to as many of us as you can .

            PM me if you would like to go for a coffee and 'New Kid' and I can tell you what we are doing.

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            • #7
              Hey Green
              Im in a similar position in wanting to start out cheap. Im looking for long term cash flow and have a modest deposit of 20k. Just wondering where abouts you found these deals as they are my sort of thing ( cheap )
              Also do you know if there will be a rent review anytime in the near future?

              at $90 a week less $15 BC its 75 a week. and after rates you only get $2900 per annum which isnt much. However it would be relatively risk free and require little work. Im interested in how you forund them

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              • #8
                Originally posted by Snookie View Post
                Sounds like you have a vision which is GREAT! Continuing to educate yourself on PT (and through various other sources) is the best way to go.

                You should come along to the Wellington PT Xmas Party next Thursday for a start...

                At the moment cashflow positive is very hard to come by (but not impossible). A few of us are trading properties - so we can pay down our mortgages and get positive cashflow that way. You have to be very careful with both strategies in the present market and talk to as many of us as you can .

                PM me if you would like to go for a coffee and 'New Kid' and I can tell you what we are doing.
                Thanks for the offer, I will definitely consider coming to the party and if not would be very interested to meet up for coffee if I can't make the party.

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                • #9
                  Originally posted by jase31 View Post
                  Im interested in how you forund them
                  http://propertybillboard.co.nz

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                  • #10
                    Well I found it on trademe, but thanks for another source

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                    • #11
                      Hi Green Goblin

                      My kids got a book about you except its called the 'Snot Goblin' bloody good book it is. Kieren Trass was on about Kawerau as being a Hot Spot for buying, saw him on the Living Channel - LJ Hooker Open Home Friday night.
                      Just thought i would let you know.

                      Shazza

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                      • #12
                        Kawerau ? Fasicnating , any reasons why?

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                        • #13
                          One reason; Cheap

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                          • #14
                            Hi there Goblin - and welcome to the forum!

                            Whilst at first glance the Kawerau properties may sound appealing, you really need to be sure you do your homework first. They may sound cheap, but they will very possibly have a higher associated costs. (For example, what is the reliability of the likely tenants like? Lower end housing will attract a certain type of tenant will not necessarily treat your property like a home and you may end up paying more than anticipated in terms of repairs, cleaning, etc.)

                            Other costs to consider:
                            - Insurance (house insurance plus possibly landlord insurance)
                            - Vacancy costs (is there a good supply of tenants in the area?)
                            - Property manager fees
                            - Repairs and maintenance


                            Be careful you don't underestimate the costs - esp repairs and maintenance!

                            As Snookie mentioned, you need to spend time educating yourself. Spend hours trawling through this forum - there is some excellent advice, and experiences shared by other forumites. Also speak to a property manager (or two) in the Kawerau area. Find out how easy it is to rent out that type of property, what they believe rent should be, and what type of tenants are likely to want your place.

                            Also - be careful about taking on existing tenants. You don't want to take on someone else's problem - and a vendor may not necessarily divulge info about bad tenants if it would prevent them from making a sale! Best to go for vacant possession. You can still get the existing tenants to 're-apply' - and give you the opportunity to check them out. If they end up having a bad history, it's better to find out now. If they turn out to be OK, you can keep them on and everyone is happy.

                            There's a couple of late-night rambling thoughts!! Good luck!
                            Lisa

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                            • #15
                              Hey Green

                              How did you get a hold of the person selling, ive emailed them and havent heard back. Do you have any other info eg cost of property mananger? I wonder why the rates are so high, $1000 for a year.

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