we arent in any hurry. but we can see this house going fairly Quickly piced the way it is..
i deffinatly get the worst house best street mentality. but i think the houses are all very similar in this area.
we are tossing up about buying a flat which is 85k 2 br but i havent seen in them(only out side) and they look in poor condition form outside so i worry we would have to spend even more to fix them up to (what i call) a reasonable standard.
but i might look at a few more..
unfortunatley we didnt come out of our sale with as much as we were told as the bank decided to implement on of their maybe fees which cost us almost half of our "profit"
Last edited by Oorki Galoorki; February 21st, 2009 at 05:07 PM.
would a flat or a unit be better?
we could easily buy for 130k for a unit or less for a flat.
what are the extras that go with having units and flats in a bills sense?
You would have to pay body corporate fees, also you would have to check that they have enough in their funds to cover any major work that needed to be done to the building.
Have you looked at DHA ? That can be very good as the defence force guarantees your rent and will replace carpets etc at the end of the lease period (10 yrs I think)
DHA dont have houses where we are.. and would never need them here.
i also know they are very strict on what they accept. 4br +2 bath is the minimum now for them
A flat or unit is great for rental income, if you can charge a high rental for the property. Generally speaking a flat does not increase in value to any degree worth a damn, so it is bought solely for income generation. Obviously this is only helpful to you if that rent will cover the mortgage repayments or more than, leaving you in a position where you are again building equity, allowing you to duplicate the process and use that equity to buy your second investment. kwim?
So personally (and this is just me) I would be inclined to buy a house that will increase in value, even if that means lower rental return, then buy an income generating flat as perhaps house 4 or 5.
If the house is a good price, the area is growing (in population, infrastructure and property value), close to schools, PT shops, etc and is in a relatively safe area, sounds good to me.
The other aspect is looking at the local councils zoning for the property. You said it was an 800sqm block. Can it be subdivided? How easy is it for you to get approval to extend the house to 4 bdrms and 2 bathrooms? Or put a swimming pool in? Or a rumpus room on the back? Or a double garage?
If you are buying this as investment, then you are looking at long term ownership. However, when adding value to the house, you must think about what people would want if they bought the property. Or what you would want should you live in it.
I would still suggest living in the house. Paying rent elsewhere for yourself, whilst collecting rent to pay a mortgage is going to leave you in no better a financial place than simply living in it yourself to pay the mortgage. (Unless you cannot afford to pay a full mortgage repayment atm)
the area we are looking at for the original house is made up of housing trust houses which are being sold off..
so i could see that in the next 5/10 yrs the area would become not so dodgy as it will become more owner occupier then lower income rent assisted (iykwim)
so do you think that it would be a decent area to buy now?
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