so uni, you buy a studio/bedsit (not sure what else you can get...

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thossil

96 Posts.

26/09/14

09:42

Post #: 14032083
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Originally posted by UniversalTrader ↑

Thossil over the life of the mortgage your rent increases and if it doesn't cover your whole costs in the early stages it will within 5 to 10 years easily.

Right now I can purchase a property for $150k in a capital city @ interest rate of 7% my payments would be approx $12k, now that same property I can rent out for around $240 a week easily which is about $12.5k. Now rates and other costs are around $2k. Even if it takes 10 years to cover all your costs that is only another $20k you would have had to kick in and it would be more than returned to you in years 11 to 30 of a 30 year loan.

Now I can do far better than that right now a) I can buy property cheaper and with a little bit of effort and money really smarten it up and get more than $240 a week - end result property basically costs me nothing from day one. I may be negative from a taxation point of view because of depreciation but that is just further cash in my pocket. At the end of the day I will own an asset worth $150k today OUTRIGHT in 30 years that has cost me nothing. That is wealth building the long term sustainable way.

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so uni, you buy a studio/bedsit (not sure what else you can get for $150k) and rent it to a student.
because it is less than 50 sqm you must stump up a higher deposit. also other costs would almost certainly be higher than $2k even if l assume you manage it yourself. can you provide a link to such a goldmine? i'm in SA, one in adelaide would be nice. but if you want to go interstate happy to open my eyes to these "opportunities".
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