on another chat group, I dont mind people posting their opinions but when they give advise in the disguise of pushing their own agendas then they should be tasked to answer all questions , not dodge them.
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Update for end of year 2017 with the 20 Properties: -
Total Debt ------------------------------------------------------------------ $2,220,274.00
Market Value apprx -------------------------------------------------------- $4,052,500.00
Equity (started at $0 January 2014) ------------------------------------- $1,832,226.00
Rent per week ------------------------------------------------------------- $6,480.00
Rent per month after expenses (PM, rates and Insurance)--------------- $21,462.87
Monthly Mortgage Payment ------------------------------------------------ $15,684.00
Principle Paid off Each Month --- ------------------------------------------ $7,685.00
………………………………………...…………………………………………………………………………………… …………….
Update for 20 Properties at the end of 2018.
Total Debt ------------------------------------------------------------------ $2,121,817.00
Market Value apprx -------------------------------------------------------- $5,060,500.00
Equity (started at $0 January 2014) ------------------------------------- $2,938,183.00
Rent per week ------------------------------------------------------------- $6,920.00
Rent per month after expenses (PM, rates and Insurance)--------------- $18,488.00
Monthly Mortgage Payment ------------------------------------------------ $15,659.00
Principle Paid off Each Month --- ------------------------------------------ $7,796.00
...……...…………………………...…...………………………………...…………………….. .………………………...………...……...
Update for 20 Properties at the end of 2019.
Total Debt ------------------------------------------------------------------ $2,019,126.00
Market Value apprx -------------------------------------------------------- $6,060,000.00
Equity (started at $0 January 2014) ------------------------------------- $4,040,874.00
Rent per week ------------------------------------------------------------- $7,225.00
Rent per month after expenses (PM, rates and Insurance)--------------- $19,690.00
Monthly Mortgage Payment ------------------------------------------------ $15,178.00
Principle Paid off Each Month --- ------------------------------------------ $8,545.00Facebook Property Chat Group NZ
https://www.facebook.com/groups/340682962758216/
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Originally posted by orion View PostUpdate for end of year 2017 with the 20 Properties: -
Total Debt ------------------------------------------------------------------ $2,220,274.00
Market Value apprx -------------------------------------------------------- $4,052,500.00
Equity (started at $0 January 2014) ------------------------------------- $1,832,226.00
Rent per week ------------------------------------------------------------- $6,480.00
Rent per month after expenses (PM, rates and Insurance)--------------- $21,462.87
Monthly Mortgage Payment ------------------------------------------------ $15,684.00
Principle Paid off Each Month --- ------------------------------------------ $7,685.00
………………………………………...…………………………………………………………………………………… …………….
Update for 20 Properties at the end of 2018.
Total Debt ------------------------------------------------------------------ $2,121,817.00
Market Value apprx -------------------------------------------------------- $5,060,500.00
Equity (started at $0 January 2014) ------------------------------------- $2,938,183.00
Rent per week ------------------------------------------------------------- $6,920.00
Rent per month after expenses (PM, rates and Insurance)--------------- $18,488.00
Monthly Mortgage Payment ------------------------------------------------ $15,659.00
Principle Paid off Each Month --- ------------------------------------------ $7,796.00
...……...…………………………...…...………………………………...…………………….. .………………………...………...……...
Update for 20 Properties at the end of 2019.
Total Debt ------------------------------------------------------------------ $2,019,126.00
Market Value apprx -------------------------------------------------------- $6,060,000.00
Equity (started at $0 January 2014) ------------------------------------- $4,040,874.00
Rent per week ------------------------------------------------------------- $7,225.00
Rent per month after expenses (PM, rates and Insurance)--------------- $19,690.00
Monthly Mortgage Payment ------------------------------------------------ $15,178.00
Principle Paid off Each Month --- ------------------------------------------ $8,545.00Last edited by Beano; 31-12-2019, 07:13 PM.
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Originally posted by Beano View PostSo a 3.9% net rental yield with weighted average interest cost of 3.9% on the portfolio Greame ?
The thing is I could buy a 7% yield today by buying well, and then say well actually the market price is $100k more so I should now base my yield on that figure and it's only 5.8%, so I should look for something better
I hear what you are saying and I'm currently selling about 17 residential properties which don't have much debt on them as they've all been owned more than 10 years. I will come out with about $4 million after the debt has been paid back on those. The reason being, I've bought a motel which settles in March which was a bit over $5.3 million and has a 21 year lease on it and a cap rate of 4.55%.
The 17 properties if they had no debt would have a net yield of less than 4% and so swapping them basically gives me an extra $68k per annum on the motel with a lot less moving parts and hassle.
I don't think it's good to look at the net yield after you've first bought until the debt is fully or almost fully paid off. Especially if you are replacing with the same, i.e. residential. If you're changing them however for something like what you do or commercial with higher net yields, then yes it can make a lot of sense.Last edited by orion; 01-01-2020, 10:50 AM.Facebook Property Chat Group NZ
https://www.facebook.com/groups/340682962758216/
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Originally posted by orion View PostI don't think it's good to look at the net yield after you've first bought until the debt is fully or almost fully paid off. Especially if you are replacing with the same, i.e. residential. If you're changing them however for something like what you do or commercial with higher net yields, then yes it can make a lot of sense.
Would you still recommend someone who has 500k capital to buy as many as he can or look elsewhere - from the tone , it seems like you want to move away from residential.
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Originally posted by Bluecoat View PostSo what basis did you make your initial purchases? Yield is a pretty good indicator .
Would you still recommend someone who has 500k capital to buy as many as he can or look elsewhere - from the tone , it seems like you want to move away from residential.
If the yield is 7% plus gross with residential in a good location and population 100,000 plus then all good, not easy to do now/ So either put in a bigger deposit to make cashflow neutral or possibly look at commercial.Facebook Property Chat Group NZ
https://www.facebook.com/groups/340682962758216/
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Originally posted by orion View PostThe yield when you buy is important, based on the purchase price or after reno cost. After that it's not unless the debt is almost or fully paid off, or you can make better use of it i.e. commercial with better net yields. No point in trying to replace it with residential as you'd have to go to a worse area each time to make the yield better. That would only make sense for investors that have bought with very low yields to start with and then realised their mistake.
If the yield is 7% plus gross with residential in a good location and population 100,000 plus then all good, not easy to do now/ So either put in a bigger deposit to make cashflow neutral or possibly look at commercial.
The flip suggestion was that current value was important for understanding if the capital could be invested better elsewhere.
Seems you have come around to the latter line of thinking.
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Yes, the yields in residential when buying at the time I was saying that were 8 - 9% gross and in my book buying those 20 properties were even higher at around 12%.
The commercial net yields were similar to the residential ones at the time so there would be no point in changing.
Now with residential gross and net yields so low, commercial is more attractive in that aspect.
So to change to commercial now can make more sense as long as you are aware of the potential risks with commercial that are different to some of the residential risks.Facebook Property Chat Group NZ
https://www.facebook.com/groups/340682962758216/
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Update for end of year 2017 with the 20 Properties: -
Total Debt ------------------------------------------------------------------ $2,220,274.00
Market Value apprx -------------------------------------------------------- $4,052,500.00
Equity (started at $0 January 2014) ------------------------------------- $1,832,226.00
Rent per week ------------------------------------------------------------- $6,480.00
Rent per month after expenses (PM, rates and Insurance)--------------- $21,462.87
Monthly Mortgage Payment ------------------------------------------------ $15,684.00
Principle Paid off Each Month --- ------------------------------------------ $7,685.00
………………………………………...…………………………………………………………………………………… …………….
Update for 20 Properties at the end of 2018.
Total Debt ------------------------------------------------------------------ $2,121,817.00
Market Value apprx -------------------------------------------------------- $5,060,500.00
Equity (started at $0 January 2014) ------------------------------------- $2,938,183.00
Rent per week ------------------------------------------------------------- $6,920.00
Rent per month after expenses (PM, rates and Insurance)--------------- $18,488.00
Monthly Mortgage Payment ------------------------------------------------ $15,659.00
Principle Paid off Each Month --- ------------------------------------------ $7,796.00
...……...…………………………...…...………………………………...…………………….. .………………………...………...……...
Update for 20 Properties at the end of 2019.
Total Debt ------------------------------------------------------------------ $2,019,126.00
Market Value apprx -------------------------------------------------------- $6,060,000.00
Equity (started at $0 January 2014) ------------------------------------- $4,040,874.00
Rent per week ------------------------------------------------------------- $7,225.00
Rent per month after expenses (PM, rates and Insurance)--------------- $19,690.00
Monthly Mortgage Payment ------------------------------------------------ $15,178.00
Principle Paid off Each Month --- ------------------------------------------ $8,545.00
Update for 20 Properties at the end of 2020.
Total Debt ------------------------------------------------------------------ $1,902,785.00
Market Value apprx -------------------------------------------------------- $8,120,000.00
Equity (started at $0 January 2014) ------------------------------------- $6,217,215.00
Rent per week ------------------------------------------------------------- $7,655.00
Rent per month after expenses (PM, rates and Insurance)--------------- $16,586.00 (now allow $400/month for maintenance)
Monthly Mortgage Payment ------------------------------------------------ $14,961.00
Principle Paid off Each Month --- ------------------------------------------ $9,514.00Facebook Property Chat Group NZ
https://www.facebook.com/groups/340682962758216/
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