澳洲Australia property Do You Own IP’s Worth $100k or under? |


在澳大利亚 The pool at of an IP needs to be resurfaced (or so the pool doctor says), the cost was estimated to be $10K ($10,000), after recoverying from my impresssion of a cat coughing up a fur ball, it just seems far too much. Its just a standard poo I need some advice regarding a property purchase. Property - semi-detached house Bedrooms - 2 Condition - average needs internal reno to modernise Street - one of the best in suburb Location - excellent Close to schools - yes Transport - 50m


Hi Everyone,

Long time no chat. Have been away from the forum for a while :D

Here’s an interesting question for you all.

Do you/or would you own Investment Property with a buying price of under $100,000 ?

A question that was raised in a conversation I had yesterday. I guess I would if it fitted into my investment plan.

Would you?

Cheers

Mick  

评论
No I would not personally for the following reasons:
1. Type of tenant you get in a $100K property
2. CG you get. Even if it doubled in value in 10 years, you are only making $100K or $10K pa growth out of it per annum. There are easier ways to do that IMO and not have to put up with tenants or long drives out into the sticks or long selling times if you have to unload the property at some point.  

评论
I have one and I had it listed for sale for 6 months last year with no luck, and currently have it listed, no luck.

Really cheap houses are extremely hard to sell.

ETA: my current house was also very sub $100k but after subdivididing and tarting it up it is worth around $250k. Add new house, make that $400k. Does that count as a sub $100k property still? :confused:  

评论
MCS_80 said: ↑
Hi Everyone,

Long time no chat. Have been away from the forum for a while :D

Here’s an interesting question for you all.

Do you/or would you own Investment Property with a buying price of under $100,000 ?

A question that was raised in a conversation I had yesterday. I guess I would if it fitted into my investment plan.

Would you?

Cheers

MickClick to expand...
I have in the past, with mixed results.

Two purchased in Tassie (a while ago now). One cost $25k and rented out at $105pw. Was a constant annoyance, not because of the tenants, but the neighbours that were Housing Commission and not going anywhere. Sold it a couple of years later for around $40k. Only made a small profit because there were constant repairs from the neighbours.

The other cost $56k and we held this problem free with only the one set of tenants. Sold it 6-7 years later for $175k. I can't remember the rent it was getting, but it was cf+ at the beginning and increased over time to around a 5% yeild. Very happy with the performance.

One in regional Vic. Still holding and is now worth around $130k. It rents for $175pw and was purchased for $67k. Again, this was about 7 years ago. Very happy with it as it has cost us nothing to hold and has little/no maintenance.

Two in regional NSW. The first one is a similar story to the first Tassie one. Same buy price and a similar sell price. Sold it a couple of years ago now and very happy I did.

The second was purchased for $90k. It would only be worth around $120-150k now. It rents for $235pw and has cost us nothing to hold, however I really don't like the area and haven't really found any PMs that can do a job that I am happy with. It will go when we have the time to go there and do a bit of updating as the tradies in this area cost too much.

So, in saying all that, we haven't lost any money on any of them, half of them have made a very good yeild AND good CG, while the other half have performed less than satisfactorily.  

评论
While I don't have any specific issues with <100k IPs, my view is that <100k IPs are usually found in non-metro areas, or very, very small. Neither of which fits into my plans (I don't know how to read regional areas, and prefer places with more land content). For that sort of money, I'd go buy a few shares instead.  

评论
What's the strategy? Say $100K, rents for $170 p.w

Then rates $1600
insurance $800
maintenance $1000
Agent $800

Net 3,311 or 3.3%

Say $280K, rents for $340
Rates $2000
Insurance $1200
Maintenance $1200
Agent $1600
Net $11680 or 4.1% plus additional depreciation benefits  

评论
Different numbers here. Take mine:

$75k. Rents for $110pw. (I paid $25k for this one)
Rates $400
Insurance $300
Maintainance ?? (everything in the house is brand new or close to it)
Agent $1200

$1880 = 2.5% gross (a LOT more if you self manage and there's probably a lot of depreciation in there as so much of the house is new)
20% net yeild for me but I still want to sell it. Its worth it as a PPoR - especially after FHOG - but not an IP.

My other house:

$180k rents for $200pw, possibly more as the house across the road is smaller, not renovated and rented for $270pw. (I paid $55k for this house in 2008 mind you)
rates $600
Insurance $300
Maintainence <$1000
agent $1600

3.8% net, also some depreciation as the place has been freshly fitted out. Why do people pay for agents again? 15+% net for me if I rented it out. Again, would prefer to sell it but very likely we'll keep it as a rental.

One we are building (not planned to be a rental for a few years)
pay $100k would rent for $280pw
rates $600
insurance $500
Maintainence ? (brand new house?)
Agent $2200

Net yield 11.2%. Serious depreciation there on a brand newie.

Not all houses under $100k are bad deals, but the lower the rent the more proportionally you shell out to useless property managers.  

评论
when you guys have the Agent line item, is this for PM fees??? If so it is very high!?!? 20% in some cases!

Why is this?  

评论
Have a few.
$10K-- $600 month
$21 K--$650 month
$0(free) --$625 month
$0(free)--$600 month
$0(free)--$650 month
$0(free)--$850 month
$55K----$800 month
$63K----$800 month
$115K---$1000 month
$129K---$1060 month
$131K---$3050 month
$149K---$1000 month
$200K-- $6900 month
$310K---$7600 month

We'll take CF+ over CG anyday.
Just because it is inexpensive, doesn't mean they are a dud.
The "free" ones are because the Vendor was an idiot.  

评论
alexlee said: ↑
While I don't have any specific issues with <100k IPs, my view is that <100k IPs are usually found in non-metro areas, or very, very small. Neither of which fits into my plans (I don't know how to read regional areas, and prefer places with more land content). For that sort of money, I'd go buy a few shares instead.Click to expand...
Ditto. Also not interested in owning say 20 x 100k dwellings. Would prefer 5 x 400k or even better 1 x 2m property.  

评论
I have 3 IPS purchased for under $100k. 2 in a regional city, and 1 10 minutes out. They have all covered their face cashflow wise from day one, (the rent covers the mortgage, I cover all the other costs) though they are old houses, and there has been fairly constant maintanence that the agent takes care of. They had good capital growth to start with (I bought them each a year apart using the increased equity each time), though they and the market havent moved much lately.
I havent had any unusual tenant issues.
For me it wasnt an either/or question, they were the best IPs I could afford at the time. I also wanted something with cashflow as I didnt want to rely on my guesses for future capital growth.
Given the same circumstances, I most likely would do the same thing today. Since then I have purchased more expensive properties in metro areas, but I always try to buy with a relatively high gross rental yeild. I like the cheaper end, its smaller bites for the lender, diversity of rental income, and there is theoretically more of a rental market as everyone can afford $150 pw rent....  

评论
tobe said: ↑
For me it wasnt an either/or question, they were the best IPs I could afford at the time. I also wanted something with cashflow as I didnt want to rely on my guesses for future capital growth.
Given the same circumstances, I most likely would do the same thing today. Since then I have purchased more expensive properties in metro areas, but I always try to buy with a relatively high gross rental yeild. I like the cheaper end, its smaller bites for the lender, diversity of rental income, and there is theoretically more of a rental market as everyone can afford $150 pw rent....Click to expand...
That pretty much sums up the situation for us at the time, too.  

评论
bene313 said: ↑
Ditto. Also not interested in owning say 20 x 100k dwellings. Would prefer 5 x 400k or even better 1 x 2m property.Click to expand...
talk to Cokethey would rather sell you 8* 250ml cans for $1.75 on which they make 30c each
than a 2L bottle for $4 on which they make $1​1 2M property does not make 20 times the rental income of 100K property, the expenses are higher, the fridge goes the tenant requires a new ssteel miele by 3pm

[noparse][paraphrase] what we have here, is a failure to remunerate [/paraphrase][/noparse]  

评论
AlmostBob said: ↑
talk to Cokethey would rather sell you 8* 250ml cans for $1.75 on which they make 30c each
than a 2L bottle for $4 on which they make $1​1 2M property does not make 20 times the rental income of 100K property, the expenses are higher, the fridge goes the tenant requires a new ssteel miele by 3pmClick to expand...
We must be talking different properties Bob.

The $2m place I'm thinking of rents for 200k p.a with the tenant paying outgoings.  

评论
the coke plant, not the coke, all good the penny drops  

评论
MCS_80 said: ↑
Hi Everyone,

Long time no chat. Have been away from the forum for a while :D

Here’s an interesting question for you all.

Do you/or would you own Investment Property with a buying price of under $100,000 ?

A question that was raised in a conversation I had yesterday. I guess I would if it fitted into my investment plan.

Would you?

Cheers

MickClick to expand...
Welcome back Mick.

-Yes, I have some (under) $100,000 IP's.

-I also have some newly constructed IP's.

-I invest in regional cities, (Victoria).

-I have, (what I consider), both solid rental returns and averaged capital growth, so I don't find my investing has meant it all mutually exclusive...(low purchase price IP's/good rental returns and growth). Around the one third of Victoria's population lives in regional Victoria. Not everyone wants or chooses to live in metro areas. (Melbourne and suburbs).

-I also have bought/built well. I buy well, at what I consider to be good value.

-Having some $100,000'ers in a portfolio, (ie meaning mine), can simply be; buying well, loan affordability (at times), and a means to an end. Two of the places are side by side, will become a unit site. Some of the "$100,000ers" we manage, some are managed by PM'[email protected] 6%.


-Balance.

The portfolio of property (land and houses) will hold me in good stead for leap frogging into other realms of investing.

Purchasing a few under $100,000ers (remember, buying well),is adding to my swag of appreciating assets, without ripping the guts out of my cashflow.

Balance.

Small fish are sweet, in balance. And it's all fun.:)

It's working for me.  

评论
Small fish are sweet..Click to expand...
...but you expend more energy capturing them than they provide.

Compare them to whale meat when you can, you'll never touch another sardine.  

评论
jacbmw said: ↑
when you guys have the Agent line item, is this for PM fees??? If so it is very high!?!? 20% in some cases!

Why is this?Click to expand...
Because that's just what they charge ... the local PM has a MINIMUM fee of $16pw, 9.9% otherwise. If your rent is below $160pw, their percentage is over 10%. They also charge 2 weeks letting fee and 1 week resigning lease fee plus $35 a quarter for inspections. For $110 a week rent, this just happens to be 20%. This is why I'm not using a PM. The same PM let the same tenants get $4000 behind in rent at their old house so they are NOT worth using.

I get my rent collected by Centerlink at 99c a pop instead, and they send me lots of statements and stuff.  

评论
Have you thought about getting into the PM game yourself? Sounds like a real money spinner, and also sounds like you wouldn't have to be too good at it either to match the service currently available :D.  

评论
Hah, its an idea, and it had crossed my mind, but I'm the small dainty kind of person and not good at intimidating big beefy tenants into paying rent. But there's a HUGE gap in the market for a cheaper PM, this one is the only one within cooee and they charge like a wounded bull. There's probably one in Pirie that services the area too but 66km vs 75km (plus another 35 to get to my IP) isn't much closer. Actually there's a gap in the market for cheaper REAs fullstop, you can spot the people trying to save money round here - they use agents from as far as Adelaide trying to dodge the insanely high local commissions on sale.

Don't you have to cough up like $4000 to do a real estate agents course first to even think about opening a PM business anyway? And you'd need a shopfront ... there are NO empty shops here ... not really a work-from-home kind of business.  

Property Investment

Australia property Selling Hints | Sydney

澳大利亚Hi folks I recall ready somewhere about what are some simple tricks for making your place more attractive during a home open. Im seriously thinking of selling my little pad and want to maximise my efforts. Any hints greatly appreciated. 评论 ...

Property Investment

Australia property Re-zoning | Sydney

澳大利亚What would the chances of a NSW Local Council allowing a community titled development (homes, community buildings, etc) on an area zoned Protected Agricultural land? Does anyone have experience in this area? Looking at the local council LEP, ...