澳洲Australia property Investment properties...how do you make a


在澳大利亚 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 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'm somewhat confused as to how it's worth having an IP in terms of income every week...

Expenses

- Mortgage repayments (say $250 a week)
- Body corporate (say $60 a week)
- Council rates (say $40 a week)
- Landlord insurance (say $10 a week)
- Management fee to agent (don't know what this is)
- Maintenance allowance for breakages, etc (say $30 a week)

Total $390 plus the agent's ongoing management fees

Earnings

- Rent (say $330 a week)

The end. How do you MAKE money!? lol

Edit - unless of course you get a high rise holiday let property that you can rent out for $200 per NIGHT.  

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If the numbers don't work for you, maybe you shouldn't buy property. lol.  

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- Depreciation will shorten the gap.
- Rents increase.
- Debt stays static.

This also assumes you're ignoring capital growth which opens up more options and looking solely at income on one property.  

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Lol, I'm not looking to buy an investment property, was just curious and I've wondered about the income side of things for a while, so thought I'd ask.

Yes, capital growth is the only point I'd think to having an IP...and I'm not sure about any tax offsets and stuff like that either.

Rents don't always go up that much. When we bought our place (PPR) 2.5 years ago the rent for it was $330. Now it'd be $340. That's terrible growth in rent!!

Our old place (when we rented) in another area started at $280 when we moved in, and by the time we moved out 5 years later, we were paying $480 and it was due to go up by another $30 a week after that. (after the first few years, it went up consistently by $20-$40 a week every 6 month lease renewal) THAT kind of growth makes it worth it.  

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stevie_sloth said: ↑
The end. How do you MAKE money!? lol

.Click to expand...
There are all sorts of ways to make money with property. If there wasn't, the government would have to provide all the rental accommodation for those that don't own or are not purchasing. The most common is simply the supply of a rental property like you have described. To put it in very simple terms, properties grow in value over time and so does rent, while the expenses stay more or less the same.

Some people buy them with a negative cashflow and get a tax break, while others will look for something with a better yield.

Stay here, ask questions, and read, read, read. Before long you will understand and want to buy one yourself. :D  

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stevie_sloth said: ↑
I'm somewhat confused as to how it's worth having an IP in terms of income every week...

Expenses

- Mortgage repayments (say $250 a week)
- Body corporate (say $60 a week)
- Council rates (say $40 a week)
- Landlord insurance (say $10 a week)
- Management fee to agent (don't know what this is)
- Maintenance allowance for breakages, etc (say $30 a week)

Total $390 plus the agent's ongoing management fees

Earnings

- Rent (say $330 a week)

The end. How do you MAKE money!? lol

Edit - unless of course you get a high rise holiday let property that you can rent out for $200 per NIGHT.Click to expand...
Geeee that sounds like a horrible investment, without knowing what it is.  

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stevie_sloth said: ↑
Rents don't always go up that much. When we bought our place (PPR) 2.5 years ago the rent for it was $330. Now it'd be $340. That's terrible growth in rent!!

Our old place (when we rented) in another area started at $280 when we moved in, and by the time we moved out 5 years later, we were paying $480 and it was due to go up by another $30 a week after that. (after the first few years, it went up consistently by $20-$40 a week every 6 month lease renewal) THAT kind of growth makes it worth it.Click to expand...
Rent appreciates according to supply and demand. It will often stagnate for a few years, then will make large increases for a few years. For example I have several properties that only grew in rent by a few dollars a week for around three years. In the last three they have all gone up $100pw. :D  

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stevie_sloth said: ↑
Lol, I'm not looking to buy an investment property, was just curious and I've wondered about the income side of things for a while, so thought I'd ask.

Yes, capital growth is the only point I'd think to having an IP...and I'm not sure about any tax offsets and stuff like that either.

Rents don't always go up that much. When we bought our place (PPR) 2.5 years ago the rent for it was $330. Now it'd be $340. That's terrible growth in rent!!

Our old place (when we rented) in another area started at $280 when we moved in, and by the time we moved out 5 years later, we were paying $480 and it was due to go up by another $30 a week after that. (after the first few years, it went up consistently by $20-$40 a week every 6 month lease renewal) THAT kind of growth makes it worth it.Click to expand...
Exactly, don't base your property assumptions on any one property. Not the bad example above, or the good one. Research what's out there. For every poor performing rental area, there will be an inversely good one. The property investors job is to try and seek out the good ones, no one intentionally wants to own a property that stagnates in rent for 5yrs.

The reality is, properties do turn positive after a number (varying for each deal) of years if they have started out negative.

You may not be sure about tax offset, but that doesn't mean it isn't there. Educate yourself on the subject and you may be pleasantly surprised how much tax you'll get back from your normal income.

Income however probably would not be the first reason to invest in property - cap. growth is the right up there, especially for those starting out as it allows you to accumulate a larger asset base sooner with which to work with (good, safe leverage). If on the other hand you're talking about having $1M cash and asking about resi property vs other investments - well then you'll probably find much better income elsewhere including businesses, equities, commercial property, venture capital etc.  

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stevie_sloth said: ↑
- Mortgage repayments (say $250 a week)
- Body corporate (say $60 a week)
- Council rates (say $40 a week)
- Landlord insurance (say $10 a week)
- Management fee to agent (don't know what this is)
- Maintenance allowance for breakages, etc (say $30 a week)Click to expand...

I'd say if it was an apartment with a body corp of $60 a week, that should include a lot of your maintenance costs (you only have to maintain stuff in your unit - and it probably won't get to $1k per year)

Apartments/Units we rent out at around $330 pw would have body corp around $30 per week at most, and rates etc would be about $20 per week.

Management fee is about 7% of rent.

Cheers,

The Y-man  

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Ditto to Skater's reply.

I was originally a skeptic when it comes to property investment but after a few months of attending seminars by them property spruikers, reading book, magazines and this forum I recently got my first investment property and in the process of buying another settling in about 6 months or so.

I'm scared to pi**in my pants but excited at the same time :) There's definitely a lot of ways to LOSE money with property but if you do it right, mitigate your risks I think it's a pretty safe investment vehicle which can earn you lots of passive income in the long term.

Y-man...wow 7% management fee? Ray White is only charging me 5.5% inc GST...is that including everything like letting fees etc?  

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When IRs hit 20% and market falls 30%, there's not much risk mitigation. It's like a massacre, you see  

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If IR's go to 20%, everyone should sell everything they own and put as much money as they possibly can in Treasuries.  

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Hmm, oh I'm sure there are great IP around, definitely, or else nobody would do them! lol

The example I gave isn't a proper example as such...it was just a hypothetical thing.

My own apartment for instance...my building is generally used as investment properties for the owners and 13 out of the 15 units are rented out (we and one other person are the only owner occupiers nowadays).

- Bought it for $337,000 2.5 years ago (12 year old building at the time, 2 bed, 1 main bath / laundry, 1 ensuite, 1 secure car space, about 120 sq metres, 2 balconies, the front one really big and overlooking the pool, and it's a 2 minute walk to the local shopping strip with some cafes, etc)

- We spent a small amount of slight renovations. New carpet throughout, new paint throughout, cleaning and re-colouring the grout in the tiled areas (you know how grout tends to get blackened and yuck over time?), put in new ceiling lights...and then within 3 months of moving in the dishwasher that came with the property leaked all over our carpet and we had to buy a new dishwasher. Luckily the body corp insurance paid for the new kitchen kickboards as they were damaged by the water...then a year later the hot water system leaked and died, and we're still in the process of having the insurance replace THOSE kickboards, and we had to fork out money for a new hot water system as well...*SIGH*

- Nowadays a likely sale price is around $330,000 - $340,000 (though it's been valued at between $340,000 - $370,000 by 3 separate real estate agents, the sale prices in the area recently for almost identical apartments in our own building and other nearby ones don't reflect those valuations at all. It's a struggle to get even $330,000)

- Rent when we bought it (there were tenants in place until a month before our settlement date when their lease ended) was $330 a week

- Rent now would be $340 a week

- Body corporate is $50 a week (that pays for pool and garden surrounds maintenance, building common area maintenance - there are 2 separate stairwells, each with 3 storeys of apartments - and building insurance)

- Council rates are approx. $40 a week

So there you go.

Edit - oh, just another thing - yeah, it does sound realistic that units selling in the $300s would have body corporates of $30-$40 a week, it's not really like that on the Gold Coast as much, because a HEAP of units are in holiday complex resorts...for instance, there're a lot of really lovely units for sale in various resorts around the place, and they're all selling for between $260,000 and $360,000, and some are 3 bedrooms, etc, and you think WOW, that's great! But the body corporates are sometimes around $100-$120 a week!!! Cause they have 10 pools, 2 spas, lagoon garden surrounds, saunas, gyms, tennis courts, about 200 units in the block, etc.

Agents here say that a body corporate of under $70 a week is LOW!  

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Just choose your property well. Ours we got for $55k after renovations and whatnot and the rent will be somewhere in the $250-300pw range. Rates $900 a year, water $45 a quarter, insurance $40 a month. New house will probably cost $150k in total (some of that from the original purchase) and would rent for $320-340pw. Our next project will be another house around the $130k mark and $250-$300pw rental. We're in a regional with disproportionately high rents.  

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alexlee said: ↑
If the numbers don't work for you, maybe you shouldn't buy property. lol.Click to expand...
Congratulations Alex, this is the most honest post of yours I've read.  

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Sunfish said: ↑
Congratulations Alex, this is the most honest post of yours I've read.Click to expand...
Hahaha! Oh Snap!  

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My view has always been that more money is made from resi property investors than by resi property investors  

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Token Funder said: ↑
My view has always been that more money is made from resi property investors than by resi property investorsClick to expand...
TF, there is a very remote possibility of that happening ( < 1%) in future. But an overwhelming majority of resi property investors who have invested over last 5-10 years are glad they invested rather than put it in bank. Numbers don't lie. I am sure you will struggle to find any property selling today for what it sold for 5-10years ago.

I am not sure what made you make such a comment that resi property investors don't make a profit from their investments?

Cheers,
Oracle.  

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Deltaberry said: ↑
When IRs hit 20%Click to expand...
I doubt that they'll ever will get to that level but assuming that they do my loans will devalue at the same rate  

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