Originally Posted by
The Great Gold Guru
Avondale is quite popular with buyers who have been priced out of Westmere,Waterview sort of area. Good schools , 10mins to CBD off-peak , train service , lots of good solid 40's and 50's houses which are the one's I like to buy , similar to quite a bit of the housing stock in Papatoetoe. My basic rule for purchasing over the next 12 months or so will be ....
Possible rent per week must equal 1.5 x house price / 1000.
So for instance if purchase for $280,000 then must be able to rent for $420/wk
( 280,000 / 1000 = 280 x 1.5 = 420 )
$280,000 mortgage at 6% = $16,800
Rates = $1600
Insurance = $400
R & M = $1200
Total annual expenditure = $20,000
Rent at $420/wk = $21,840
Positive cashflow of $35pw at 100% gearing. ( $30-$50pw is my target )
In both Papatoetoe and Avondale I beleive this equation to be possible , strong rental demand in both areas , good solid housing stock , plenty of choice , find the right vendor and keep making offers til one is accepted. Getting the finance will be the hard part but I have 8 other properties with an LVR at 65% over the portfolio so pretty sure if I buy at 10-20% under RV I will get most deals accross the line.
Buying well and keeping good tenants is the key. I think that is not beyond most people.