Can anyone find Cashflow + properties.

[Clark Kent]

I trawl the net looking at Trade Me and www.realestate.co.nz websites, yet i struggle to find + CF properties. Especially down here in Chch. The only places i seem to find them is in Murapara in the BOP and Tokoroa. Which i feel arent suitable areas.

When i crunch the numbers i always assume an interest rate of 7.5%, how is everyone else finding it, are you guys currently buying or seeing +cashflow property around the country?

Do i need to be putting in low offers to improve the numbers?

[utopian201]

When you mean cashflow +, do you mean after interest on a 100% loan? I know some on this forum use that.

I have a sizable deposit, also looking in Chch for about 8 months now. For me, cash flow + is after interest with a deposit, not 100% loan.

So far I have not found any property in the areas I'm looking at where the net rental return exceeds 4-5%. Users on this forum said they will not consider anything below 6-8%.
For me to get even 4-5%, I have had to put in low offers, all of which have been rejected.

These properties (because of my large deposit and assuming my low offers were accepted) are cash flow -ve in the first year (only a couple of hundred) and positive thereafter.
This has been my experience so far anyway...

[Clark Kent]

Cashflow + on a 100% loan using existing equity.

[muppet]

Good article in this month's Property Investing Magazine on Kawerau and Tokoroa.

[AMR]

I trawl the net looking at Trade Me and www.realestate.co.nz websites, yet i struggle to find + CF properties. Especially down here in Chch. The only places i seem to find them is in Murapara in the BOP and Tokoroa. Which i feel arent suitable areas.

When i crunch the numbers i always assume an interest rate of 7.5%, how is everyone else finding it, are you guys currently buying or seeing +cashflow property around the country?

Do i need to be putting in low offers to improve the numbers?

There are some shoeboxes in the CBD which are yielding 9% net.

[nintiger]

i'm in chch. I have never see 7,8,9% return. even very hard to find a 6% ones. I started looking from 2 years ago roughly. I'm newbie. I guess trademe or realestate is not a good place if you are looking for a better buy?

[McDuck]

Cashflow + on a 100% loan using existing equity.

No you will not find a cflo+100% loan deal these days.

As a side note, would you be happy to loose your equity should you find a +csflo deal which then went bad?
Not of my worry, but you know thats the dice you are throwing right?

[Branca]

Hi Clark, I'm in the same boat as you. Looking for CF+ with no deposit, just equity (or at most a very small deposit) but also wanting to avoid Tokoroa, Kawerau! I'm finding it challenging and haven't purchased yet, have only made offers on two properties in the last few months. And now it looks like it may be trickier still if building depreciation disappears. I have been advised to make lots of low offers, and also to look for 'twists' where you can squeeze extra value out of a property, such as cheaply creating an extra bedroom. Where are you based and are there particular areas you are looking? There are some property finders here on the forums who might be able to help or point you in the right direction.

[Devious0]

I find empty negative geared properties that need a tidy up in some way that makes a huge difference and then increase the rent and become cash-flow positive after the first 6 to 18 months.

Sometimes I only have to tidy the garden and make it low maintenance or paint a room or two, change the curtains purchased cheap from the warehouse. Student properties I upgrade the white-ware and supply nice corner lounge suite, put in a second hand telly all purchased cheap from Trademe.

[muppet]

also wanting to avoid Tokoroa

Obviously hasn't read the relevant article in this months Property Investors Magazine.

[Orkibi]

Positive cash-flow in the 3 main city's if not rented by the room are very hard to come by.

in todays market when interest rates are around 8% you will need to buy over 9.5%gross (which would most likely will be in lower socio areas) or say 8%-9% Net for been naturally geared.

It is simple, If you borrow 100% which most investor do or calculate on that an pay 8% for your money, you will have to have higher yield to be naturally geared (at list) as on top of that 8% cost of money you have additional expenses of Rates, Insurance, ,maintenance and Management.

My strategy in the main city is - buy naturally geared or close to and have the option to add value.

If you wait for a 10% Yield (Not crappy flats with BC cost etc ) In Akl Chch Or wellington. - you will wait until the next decade and still not find anything.

8%+ are definitely achievable in AKL but not as easy to find in Chch.

[spurner]

I just bought a 3 flat property in Newtown, Wellington, which is now showing 9.2% gross return. Just settled on it last month.

There are genuine positive cashflow properties available out there in good locations, without having to resort to RBTR tactics or moving to poor areas.

However there are not many of them, and these kinds of returns tend to be created, rather than bought at the outset.

[Davo36]

Spurner, would you mind sharing a bit more info about your latest acquisition?

a) How did you find the property? Was it offered to you by an agent? Or did you find it by looking through the papers/TradeMe etc?
b) Did you borrow money, and if so at what rate please?
c) You say this sort of return has to be created, how did you create the return with this property?

David

[Clark Kent]

Obviously hasn't read the relevant article in this months Property Investors Magazine.

I will have a read of the article tonight. Im also not sure about purchaisng a property so far away from our base in Christchurch, if i were to purchase in Tokoroa or nearby, it might make it harder to organise tenants, a good property manager, sort repairs, renovations etc.

How do other PI's on here get on with rentals some distance from where they live, are they are hard to manage?

[Clark Kent]

I do like the idea of buying property that i can manufacture an increase in yeilds, such as cosmetic renovations to increase rent, adding an extra room, adding a minor dwelling if the section permits.

I did notice alot of the properties in Tokoroa had large sections that could warrant a minor dwelling as well as some cosmestic improvements to increase the yields.

Perhaps if i brought some of these properties over time with a 20% deposit so i have reasonable cashflow then the cashflow from these properties can help fund slightly negatively geared or neutrally geared properties down here in chch.