Dear PTers,
A few PT posters recently poo-pooed the idea that cashflow positive properties could be purchased in reasonable areas of Auckland.
Well I am happy to report that it is definitely possible. And I researched and bought from abroad while stationed in Taiwan.
My search was focused on Papatoetoe, Manukau. On my last trip back to my old home town (Mangere East/Papatoe) I was impressed with the growth of the area around Manukau City. All the national big brands had set up huge warehouses and the place had the feeling of becoming the new big-box shopping hub of Auckland. I am bullish on the employment and growth prospects in the area as well as the excellent transport links (new motorways and train station within 10 mins walk).
On Mar 4 2011 I finaly settled on a legal 4+2 Home and Income on Puhinui Road.
Here is how the numbers stack up
Purchase Price
$460K + $5k Reno = $465k
Rent
$750 a week rent for $37,500 @ 50 weeks
Expenses
Rates $1,772
Insurance $1,007
PM fees (7.5% incl GST) $3,000
$5,779 total
Finance
$465k 100% finance at 6% would be $27,900 interest
The numbers
$37,500(rent) - $27,900(finance) - $5,779(expenses) = $3,821 cashflow positive a year
I know Maintence will eat up a portion of this cashflow but for me the important thing is the house will not cost me anything to hold.
Hope this is some food-for-thought for the cashflow+ forum doubters out there.
Would be happy to expand further.
Regards
Shane D
A few PT posters recently poo-pooed the idea that cashflow positive properties could be purchased in reasonable areas of Auckland.
Well I am happy to report that it is definitely possible. And I researched and bought from abroad while stationed in Taiwan.
My search was focused on Papatoetoe, Manukau. On my last trip back to my old home town (Mangere East/Papatoe) I was impressed with the growth of the area around Manukau City. All the national big brands had set up huge warehouses and the place had the feeling of becoming the new big-box shopping hub of Auckland. I am bullish on the employment and growth prospects in the area as well as the excellent transport links (new motorways and train station within 10 mins walk).
On Mar 4 2011 I finaly settled on a legal 4+2 Home and Income on Puhinui Road.
Here is how the numbers stack up
Purchase Price
$460K + $5k Reno = $465k
Rent
$750 a week rent for $37,500 @ 50 weeks
Expenses
Rates $1,772
Insurance $1,007
PM fees (7.5% incl GST) $3,000
$5,779 total
Finance
$465k 100% finance at 6% would be $27,900 interest
The numbers
$37,500(rent) - $27,900(finance) - $5,779(expenses) = $3,821 cashflow positive a year
I know Maintence will eat up a portion of this cashflow but for me the important thing is the house will not cost me anything to hold.
Hope this is some food-for-thought for the cashflow+ forum doubters out there.
Would be happy to expand further.
Regards
Shane D
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