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How to spot a good deal quick

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Your Investment Property | 17 Jan 2013, 12:00 AM Agree 0
Looking for a quick way to size up a deal instead of embarking on lengthy and time-consuming due diligence? Read on for your ultimate cheat sheet on how to assess a deal fast
  • Harman | 17 Jan 2013, 02:22 PM Agree 0
    Hi
    The article talks about 4 calculations. Where are the other 2?
    Regards
  • David Mawson | 18 Jan 2013, 01:32 PM Agree 0
    You need to check your numbers.

    If you think you need 10% rental yield with an 80% LVR for a property to be positively geared, you are seriously mis-calculating your net retrun. Unless you are paying a ridiculously high interest rate or fees in the from of rates, management fees etc this is simply not true, not to mention the deductions you will get from interest, depreciation etc etc

    With the following assumptions: Ineterst rate 5.60%, council rates $2000 pa, management fee of 7.5%, $500 pa maintainence and $700 pa insurance, a $400,000 property with an 80% LVR ($320K loan) would be positively geared with a weekly rent closer $440 p/week, not $800.
  • johnny | 21 Jan 2013, 04:01 AM Agree 0
    hi
    living in norway...can you still help me out in finding the best way of buing an investment property in australia/nsw
  • andymang | 21 Jan 2013, 07:22 PM Agree 0
    what actually is "due diligence"?
  • Madaline | 22 Jan 2013, 09:17 AM Agree 0
    Due Diligence is an investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to a sale. Generally, due diligence refers to the care a reasonable person should take before entering into an agreement or a transaction with another party.
    In a nutshell, it's doing your own homework. Very Important!

  • Madaline | 22 Jan 2013, 09:18 AM Agree 0
    "QUOTE: Harman says on 17/01/2013
    The article talks about 4 calculations. Where are the other 2?"

    On the next page Harman. :-)
  • Bb | 07 Mar 2013, 11:12 PM Agree 0
    Your comment. Alternative investment returns is just plain silly (and misleading). Buckets of evidence shows that the all ords offers gross returns similar to residential property over 10+ year time frames. The irr's you have calculated are based on geared returns, to which you compare against UNgeared share and fund returns. That's an investment analysis 101 failure and oversights like that cast doubt on the accuracy of the whole article (rightly or wrongly)
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