Hey folks,
Just had a quick look at the townhouse/units market, my budget is about $500 fully mortgaged(leverage from existing equity), the rents are approx $400-$500 for the price I am looking at. I did some quick calculation based on existing interest rate and regular cost, it's going to be about break even, if interest rises it will be negative cash flow. It seems to me it's a bit risky since I also need to factor in vacancy periods. The only thing I can hope is the property value appreciates and rent rises(which is so slow that doesn't even matter).
I am writing here to wonder if I got my thinking right as above? What do you guys reckon in the next 10 years? What and where would you invest?
My other option is to build on existing IP, which is 733 sqm land in Manurewa, has an existing house currently rented at approx $550. But the storm water connection stopped at my neighbours driveway, which I will need to get their permission to dig up and extend it. Plus the cost of resource/building consent etc which is going to be huge but still has nothing built. What would you do?
Cheers
J
Just had a quick look at the townhouse/units market, my budget is about $500 fully mortgaged(leverage from existing equity), the rents are approx $400-$500 for the price I am looking at. I did some quick calculation based on existing interest rate and regular cost, it's going to be about break even, if interest rises it will be negative cash flow. It seems to me it's a bit risky since I also need to factor in vacancy periods. The only thing I can hope is the property value appreciates and rent rises(which is so slow that doesn't even matter).
I am writing here to wonder if I got my thinking right as above? What do you guys reckon in the next 10 years? What and where would you invest?
My other option is to build on existing IP, which is 733 sqm land in Manurewa, has an existing house currently rented at approx $550. But the storm water connection stopped at my neighbours driveway, which I will need to get their permission to dig up and extend it. Plus the cost of resource/building consent etc which is going to be huge but still has nothing built. What would you do?
Cheers
J
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