Hey guys,
New to real estate investing and hoping to get a little help.
Recently bought our first home (Feb) and have since fixed up, built equity and saved. We're now looking at our first rental property.
I've noticed in my area (Brisbane, Australia) that there are townhouses in gated communities selling for $200 - $250k (LOW in Australia!)
That would cash flow, after all costs (insurances, government rates, taxes, etc.) to about $2k per year with a 20% down payment.
Pretty good as far as I've been able to see in my initial research.
Most places do NOT cash flow positive in my area at 80% leverage.
What's the downside?
These townhouses, using comps in similar gated communities or in the same ones, are selling for an average of $40,000 LESS than they originally sold for 10 years.
Is this something to be scared of? Property value DEPRECIATION?
My thoughts
It does limit the ability to build equity and refinance to pull cash out towards the next property.
However, with the cash flow increasing each year as the principal is gradually paid down, does that matter?
Would appreciate your thoughts fellas, what is this newbie missing? Am I crazy?
New to real estate investing and hoping to get a little help.
Recently bought our first home (Feb) and have since fixed up, built equity and saved. We're now looking at our first rental property.
I've noticed in my area (Brisbane, Australia) that there are townhouses in gated communities selling for $200 - $250k (LOW in Australia!)
That would cash flow, after all costs (insurances, government rates, taxes, etc.) to about $2k per year with a 20% down payment.
Pretty good as far as I've been able to see in my initial research.
Most places do NOT cash flow positive in my area at 80% leverage.
What's the downside?
These townhouses, using comps in similar gated communities or in the same ones, are selling for an average of $40,000 LESS than they originally sold for 10 years.
Is this something to be scared of? Property value DEPRECIATION?
My thoughts
It does limit the ability to build equity and refinance to pull cash out towards the next property.
However, with the cash flow increasing each year as the principal is gradually paid down, does that matter?
Would appreciate your thoughts fellas, what is this newbie missing? Am I crazy?
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