I'm tired of increasing monthly repayments and would appreciate some feedback/ideas on how to do better with my properties. I actually called my bank ANZ to ask some questions and maybe arrange a further discount but I ended up hanging up on them as they said I had to go into the bank with 100 points of ID as I had answered a question wrong. Ended up swearing at them..
Ok so here I have some figures and radical ideas to improve things:
I used http://mozo.com.au to get some comparisons but I have not looked at any details on what the loans involve, i.e. exit fees, setup fees etc...
So I have for this property in my example:
Current Loan with ANZ:
IO loan repayments $13,776 or per month $1148
Strata $1,424 or per qtr $356
Rates $800 or per qtr $200
Water $843 or per qtr $211
Insurance LL $266 or per month $22.15
PM fees $801 - 5.50%
Other PM fees $40 Anual Statement fees etc
Total running costs $17,949
Expected annual rent $14,560 - Rent per week $260
Cash income $14,560
Straight cash flows before tax
-$3,389 pa
-$65 pw
Now here is what it would take to get it out of the red:
Proposed Changes:
Change from ANZ to "Hemisphere Financial Solutions" (save $108 pm)
Put Rent up to $280 per week (extra $80 pm)
Stop paying insurance (save $22 pm)
Get rid of the Property manager and manage myself (not too keen on this)
IO loan repayments $12,480 or per month $1,040
Strata $1,424 or per qtr $356
Rates $800 or per qtr $200
Water $843 or per qtr $211
Insurance LL $0 $0.00
PM fees $0
Other PM fees $0
Total running costs $15,547
Expected annual rent $15,680 or per week $280
Cash income $15,680
Straight cash flows before tax $133 pa
$3 pw
I have attached the spreadsheets for these ( very nice if you want to use for your own properties that include more details).
If you can offer other ideas to improve cash flow then let me know thanks.
These are the only things I can really think of to make this property an investment rather than a burden but it might be the only way unless I want to wait another 3 - 5 years for rents to rise and the property becomes profitable fromt the rent.
Ok so here I have some figures and radical ideas to improve things:
I used http://mozo.com.au to get some comparisons but I have not looked at any details on what the loans involve, i.e. exit fees, setup fees etc...
So I have for this property in my example:
Current Loan with ANZ:
IO loan repayments $13,776 or per month $1148
Strata $1,424 or per qtr $356
Rates $800 or per qtr $200
Water $843 or per qtr $211
Insurance LL $266 or per month $22.15
PM fees $801 - 5.50%
Other PM fees $40 Anual Statement fees etc
Total running costs $17,949
Expected annual rent $14,560 - Rent per week $260
Cash income $14,560
Straight cash flows before tax
-$3,389 pa
-$65 pw
Now here is what it would take to get it out of the red:
Proposed Changes:
Change from ANZ to "Hemisphere Financial Solutions" (save $108 pm)
Put Rent up to $280 per week (extra $80 pm)
Stop paying insurance (save $22 pm)
Get rid of the Property manager and manage myself (not too keen on this)
IO loan repayments $12,480 or per month $1,040
Strata $1,424 or per qtr $356
Rates $800 or per qtr $200
Water $843 or per qtr $211
Insurance LL $0 $0.00
PM fees $0
Other PM fees $0
Total running costs $15,547
Expected annual rent $15,680 or per week $280
Cash income $15,680
Straight cash flows before tax $133 pa
$3 pw
I have attached the spreadsheets for these ( very nice if you want to use for your own properties that include more details).
If you can offer other ideas to improve cash flow then let me know thanks.
These are the only things I can really think of to make this property an investment rather than a burden but it might be the only way unless I want to wait another 3 - 5 years for rents to rise and the property becomes profitable fromt the rent.
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