I wish to have advice whether this is a sensible idea.
I have 3 investment properties that are positively geared in areas which are more focused on dividend yield rather than capital gain. I am looking at another property with the focus on capital growth and maybe a property I could live in one day. I am looking at areas of Mount Maunganui with high capital growth potential. Unfortunately entry prices for a 3 bedroom unit start in the $600,000s. This would give me a net yield of 2.75% (deducted rates, insurance, management fees). So I would be relying on capital gain of 4-5 % annually. Putting equity of $200000 into the property and borrowing 400000 hopefully at 5% fixed interest only for 5 years means my interest bill would be $20000 annually. So my input would be $50 per week plus any repairs (short fall from rent to cover the interest) to hold this place for 5 years.
Advice appreciated.
I have 3 investment properties that are positively geared in areas which are more focused on dividend yield rather than capital gain. I am looking at another property with the focus on capital growth and maybe a property I could live in one day. I am looking at areas of Mount Maunganui with high capital growth potential. Unfortunately entry prices for a 3 bedroom unit start in the $600,000s. This would give me a net yield of 2.75% (deducted rates, insurance, management fees). So I would be relying on capital gain of 4-5 % annually. Putting equity of $200000 into the property and borrowing 400000 hopefully at 5% fixed interest only for 5 years means my interest bill would be $20000 annually. So my input would be $50 per week plus any repairs (short fall from rent to cover the interest) to hold this place for 5 years.
Advice appreciated.