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  1. #1
    Join Date
    Apr 2008
    Location
    Auckland
    Posts
    377

    Default GLOVES OFF - R 18 - DON'T OPEN IF YOU ARE TOO PC - Vent your fustrations here

    Am hoping this will be a thread where frustrations can be vented.

    Ok,

    I am sick of the premise that pure +ve cashflow is the WT&L. I have experienced a $20 p/w +CF property until unexpected maintenance hits me with an $8000 bill (prob more to come). For me it reinforces the philosophy to buy well in a good area (-CF if you can handle it) and soak the gains instead. Small town NZ to me is no longer an option. Oh and local govt rates is likely my next grope.

  2. #2
    Join Date
    Feb 2011
    Posts
    166

    Default

    Sorry disagree with you completely. Although i did think it wqs near immpossible when i was looking... Although i was looking in the wrong place! The cash flow +ve arent on trade me, you need real estate agents to call you with thdem thr day before they hit the market and be ready to make an offer. I got two good buys in hamilton last year and both in solid areas with good growth too.

  3. #3
    Join Date
    Jul 2011
    Location
    Tauranga
    Posts
    2,769

    Default

    Long Term maintenance plans (10+ years) help prevent unexpected maintenance issues and identify potential problems.

  4. #4
    Join Date
    Feb 2004
    Location
    Wellington
    Posts
    2,776

    Default

    Watchful is smelly and his mother dresses him funny...........but I'd pay to watch you grope your local councilors.

    Wait, that's what you meant for this thread right????

    Nothing wrong with -'ve cashflow IMHO as long as you have a plan in place to change it to positive eventually.......also don't kid yourself that $20/week +'ve is really +'ve unless you're accounting for the unexpected stuff too.

    Cheers
    Spaceman
    Delightfully in need of some Tender Loving Care
    Blessed are those who can give without remembering and take without forgetting
    Some things are not as they seem, nor are they otherwise

  5. #5
    Join Date
    Sep 2011
    Location
    Dunedin
    Posts
    1,675

    Default

    so where are the naked chicks???

  6. #6
    Join Date
    May 2008
    Location
    Manukau Auckland
    Posts
    1,049

    Default

    Quote Originally Posted by watchful View Post
    Am hoping this will be a thread where frustrations can be vented.

    Ok,

    I am sick of the premise that pure +ve cashflow is the WT&L. I have experienced a $20 p/w +CF property until unexpected maintenance hits me with an $8000 bill (prob more to come). For me it reinforces the philosophy to buy well in a good area (-CF if you can handle it) and soak the gains instead. Small town NZ to me is no longer an option. Oh and local govt rates is likely my next grope.
    Watchful,

    And if that $8,000 bill hit you on a heavily -ve cashflow property you would have been in an even worse situation i.e. regular weekly mortgage top ups from your own pocket plus the $8,000 bill.

    Thankfully, on your cashflow +ve property you haven't had to dip your hand in your pocket on a weekly basis to top up the mortgage so you should have laid aside some "rainy day" money in preparation for unexpected maintainence.

    I can't see why you are so down on cashflow +ve properties.

    Shane

  7. #7
    Join Date
    Apr 2005
    Location
    Wellington
    Posts
    1,584

    Default

    $20 a week cash flow? That simply just doesn't cut it, even if you were making the $20/week every week of the year and didn't get any unexpected expenses coming up, big or small, it still doesn't cut it. $20 a week is simply not enough reward for all the investment you have made, the $x00,000 you have on the line, the loan from the bank, the calls from the tenants, the risk of vacancies, maintenance and interest rate increases... and you do all this work and take all this risk for 1/5 of a tank of petrol? If it's in a good capital growth area and your intentions are to aim for capital gains then that would be a different story, but owning this property for positive cash flow is madness (imho).

    You need to make serious positive cash flow; enough to cover not only all your expenses (both expected and unexpected), but also to reward yourself for putting together a good deal, to pay yourself for your time, and compensate yourself for the risk you are taking.

    I love cash flow properties. As an example, I recently bought a 3 flat property in Te Aro (2br+4br+1br), got it for a good price $860k, borrowed 100% at 5.74%, increased the rents from $66k to $77k pa within 6 months and without doing any renovations, and now clear $2000/month off it.

    My 2c.

  8. #8
    Join Date
    Feb 2004
    Location
    Wellington
    Posts
    2,776

    Default

    Of course you're a liar....everybody knows it's impossible to buy cash-flow positive properties today.




    Joking
    Spaceman
    Delightfully in need of some Tender Loving Care
    Blessed are those who can give without remembering and take without forgetting
    Some things are not as they seem, nor are they otherwise

  9. #9
    Join Date
    Sep 2007
    Location
    Auckland
    Posts
    8,305

    Default

    Quote Originally Posted by spurner View Post
    $20 a week cash flow? That simply just doesn't cut it, even if you were making the $20/week every week of the year and didn't get any unexpected expenses coming up, big or small, it still doesn't cut it. $20 a week is simply not enough reward for all the investment you have made, the $x00,000 you have on the line, the loan from the bank, the calls from the tenants, the risk of vacancies, maintenance and interest rate increases... and you do all this work and take all this risk for 1/5 of a tank of petrol? If it's in a good capital growth area and your intentions are to aim for capital gains then that would be a different story, but owning this property for positive cash flow is madness (imho).

    You need to make serious positive cash flow; enough to cover not only all your expenses (both expected and unexpected), but also to reward yourself for putting together a good deal, to pay yourself for your time, and compensate yourself for the risk you are taking.

    I love cash flow properties. As an example, I recently bought a 3 flat property in Te Aro (2br+4br+1br), got it for a good price $860k, borrowed 100% at 5.74%, increased the rents from $66k to $77k pa within 6 months and without doing any renovations, and now clear $2000/month off it.

    My 2c.
    Spurner, that's $1480 a week ($77k/52). Say $300 for the 1 beddy, $350 for the 2 beddy, leaves $830 for the 4 bedroom place which sounds high?

    Not to take anything away from what you've done but must be quite high rents?

    And also, how do you think you manage to find these properties when so many others struggle? Most seem really happy if they can get $20 positive cashflow, yet you seem to be able to pick up these multi unit residential places that are showing good returns quite regularly????
    Last edited by Davo36; 13-01-2012 at 09:59 AM.
    Squadly dinky do!

  10. #10
    Join Date
    Feb 2004
    Location
    Wellington
    Posts
    2,776

    Default

    ^If I may......I think it's because people are looking for love in the wrong places.

    My 3 flat property has been without doubt my best investment....I should buy more of them.......yet all of the others are your basic stand alone houses.......stupid me ....must ....take....page...from ...spurners....book.

    Cheers
    Spaceman
    Delightfully in need of some Tender Loving Care
    Blessed are those who can give without remembering and take without forgetting
    Some things are not as they seem, nor are they otherwise


 

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