• Login:
Welcome, Register Here
follow PropertyTalk on facebook follow PropertyTalk on twitter Newsletter follow PropertyTalk on LinkedIn follow PropertyTalk on facebook
Results 1 to 9 of 9
  1. #1

    Default How to find cash flow positive investment properties??

    A friend told me of a property for sale at $200k, with rental of $300 pw.
    This sounded reasonable to me so I used an on-line calculator to work out whether this is near CF +.
    Using Westpac online calculator, the returned result with this rental is:

    You could be paying off a $ 224,860 home ! This assumes a loan over 25 years at an average interest rate of 6.49%p.a. with minimum fortnightly payments of $600 and a $31,480 deposit).

    If I pay 20% of the purchase price & borrow 80%, do you think this is a pre-tax CF+ property??

  2. #2
    Join Date
    Oct 2005
    Location
    Queenstown, Dunedin
    Posts
    121

    Default

    Go one step further use this calculator http://homebuyerscentre.co.nz/calcul...x?PostingID=41

  3. #3
    Join Date
    Jun 2005
    Location
    auckland New Zealand
    Posts
    5,236

    Default

    You must use 100% of borrowings to work out cashflow.
    So in your example making a few assumptions
    Costs
    200,000 X 6.49% = $249 per week
    Rates = $30
    Insurance $10
    Vacancy = $17
    PM fees = $24
    Maintenance = $20

    So total outgoings are approx $350 per week against income of $300.
    So PRETAX this property is cashflow negative.
    Without knowing your exact tax position I get you to about $5 cashflow negative after tax unless you have very high chattel valuation or more than 55% of purchase price is improvements.
    So this is a very, very ordinary deal in this market.

  4. #4
    Join Date
    Jun 2008
    Location
    Auckland/Tauranga/Gold Coast
    Posts
    2,960

    Default

    nice work dean.

  5. #5
    Join Date
    Sep 2004
    Location
    Central Otago, ChCh, AKL
    Posts
    2,443

    Default

    As a rule of thumb for positive cash flow buy for $200,000 Rent for $400PW.

    This is depend on the Interest rates,
    6.49%p.a.
    is NOT the NZ average so I would not do long term plans on that. it is more around 8%.
    Last edited by Orkibi; 03-08-2009 at 10:59 PM.
    New Zealand's #1 Marketplace for Property Investors & Sellers!
    FREE Access to HOT Property Deals
    CLICK HERE FOR MORE INFO.

  6. #6
    Join Date
    Sep 2004
    Location
    Central Otago, ChCh, AKL
    Posts
    2,443

    Default

    Also, I find out that in most cases with properties that the annual expenses is around 20%-30% off the total annual rent/income If the gross yields is 2.5% ++ more then the Interest rates then the property would be Cash flow positive.

    Just in general for quick first upfront assessment.

    **the first example above would be more accurate
    New Zealand's #1 Marketplace for Property Investors & Sellers!
    FREE Access to HOT Property Deals
    CLICK HERE FOR MORE INFO.

  7. #7

    Default

    Thank you all for the comments, most helpful. How to find a house costing $200k and fetching 400 pw in rental? I don't think that's possible any where in Auckland??

  8. #8
    Join Date
    Sep 2004
    Location
    Central Otago, ChCh, AKL
    Posts
    2,443

    Default

    How to find a house costing $200k and fetching 400 pw in rental? I don't think that's possible any where in Auckland??
    Thats what I thought, you Have to look for multiple income properties and bargain hard on the price. better be pre approved as cash buyer.

    those deals are out there but you will not see them advertise at the papaers...

    I may be able to help with finding you a property drop me a PM with your criteria when you are ready to buy move quick with finance sorted.
    those deals don't last long.
    New Zealand's #1 Marketplace for Property Investors & Sellers!
    FREE Access to HOT Property Deals
    CLICK HERE FOR MORE INFO.

  9. #9
    Join Date
    Aug 2005
    Location
    Auckland
    Posts
    236

    Smile Dean is right

    Team

    follow the numbers


 

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Similar Threads

  1. Best Spots for Positive Cash Flow Properties in NZ?
    By mattinvestor in forum Property Investment (NZ)
    Replies: 5
    Last Post: 04-05-2012, 11:07 PM
  2. Looking for cash flow positive properties
    By Danz in forum Property Investment (NZ)
    Replies: 7
    Last Post: 14-05-2009, 02:56 PM
  3. Cash Flow Positive Property
    By AndyK in forum Property Investment (NZ)
    Replies: 1
    Last Post: 25-10-2008, 07:46 PM
  4. Cash Flow Positive (CF+) - what is it really ?
    By Bluekiwi in forum Property Investment (NZ)
    Replies: 17
    Last Post: 06-07-2008, 10:31 AM
  5. Positive cash flow to be safest?
    By alliantGTR34 in forum Property Investment (NZ)
    Replies: 107
    Last Post: 08-04-2008, 07:47 AM
  6. The power of positive cash flow.
    By Glen in forum World in General
    Replies: 1
    Last Post: 02-03-2008, 10:24 AM
  7. Citibank Scam
    By donna in forum General (NZ)
    Replies: 1
    Last Post: 19-09-2004, 01:21 PM
  8. Positive Cash Flow
    By captain_kirk in forum Property Investment (NZ)
    Replies: 7
    Last Post: 15-01-2004, 06:38 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •