Rent of just $550 p/w for an $800K property seems very low. I recently purchased a 3x2x2 for $595K in Perth and it's getting $580 p/w. Also, being cash flow positive gives peace of mind, but in the long run the real money is in capital growth. I went for a mix of both.
you might address this im at 4:30 in videa at time of comment, the other major benefit of 2 vs 1 is the robustness, if a renter is lost in one you still have the other for now, instead of cash outage its graceful degradation. (IT high availability concept utilized) edit: this is addressed starting around 7:38
Management fee is rent dependent so higher rent means higher management cost. So costs of ownership is more than double in a 2 v 1 property scenario. 2.5 times is more accurate. Risk is lower with split tenancies losing 1 tenant in a single property scenario though. Best is multiple unit complexes on single title. From 2 to 10s of units. Saves on rates, insurance and you can usually shave the management fee.
I still believe that blue chip properties in affluent subrubs are the best for long terms investment, yes maybe in some year some blue collar arears might out perform but historically in the long run, blue chip always end up better
Thanks for the great Video Ravi… at what point do you start considering the principal payments? Obviously at some point the bank is going to want their money back, what is your position using the above examples could you please do a video on this please?
In case number 1, where you suggest rent to be $550 sounds outdated. There are almost no units out there at the moment that rent is lower than $650/week.
Would be interesting to factor in stamp duty. Also comparing this scenario in similar suburbs would be more fruitful. 12 months data for property seems a bit short and in this example it can show that maybe regional is lagging behind capital cities in terms of the downturn.
Landing onto this video after searching for the exact title. It was definitely helpful in understanding the concept overall but couldn't relate it well to the real estate situation in India. Also, one suggestion, the handwriting is not easily readable. Thanks for the video.
Hi Ravi One thing I can't understand why do we need to buy property when we are going to pay double amount once we get rid of mortgage.e.g if I buy a property for $800000, in 30years I am going to pay 770000 interest on it so total will be nearly double. Doesn't make sense to me🙄🤔🤔🤔🤔
Ravi, I have 1 property that i bought a few years ago as a home, I am now renting it out as I am living and working overseas and it is a negative cashflow. But the price has gone up. Could you help me to use the equity so I can get a second property as I want to keep my home for when I return but I also want to get more houses in the near future in rural towns of Victoria.
Thanks Ravi - just wanted to ask about how/when to factor in cost of a buyer’s agent when looking at investments properties - is usually an upfront cost or ??
@@PersonalFinancewithRaviSharma rent is usually directly related to price so a house worth $ 800,000 would be rented closer to $ 800 p.w. it would usually be in an area of middle class rates as opposed to the 2 houses going for $ 400,000 that would be in a lower rate district and again the rent being relative to the price so your estimate was reasonable, I do feel the loss on the more expensive house option would be less and the expenses on the cheaper house package would be less, as I did mention your overall theme is still relevant and I enjoyed your delivery and topics but I am glad you were intrigued by my response and humble enough to ask why I had that opinion
@@SGTMARSHALL1 I based this on real examples where the average rental yield was about $500-$600pw. In some areas you get a greater yield but that can also be applied to the cheaper properties. But as always, wouldn’t be able to cover every property. Thanks for watching 🙌🏽
@@PersonalFinancewithRaviSharma I was about to comment on a similair theme to what Marshall said. You are comparing a property in a capital city vs properties in the regions so of course the rental yields will skew favourably to regional. Would it not have been better to compare both scenarios in regional properties or both in capital city properties to have an apples to apples comparison? Are there not good regional properties available in the circa 800k price range that give similair yields?
@@jskf01 I have to assume the scenario was relevant to Ravi's surrounding areas and thus the prices are a reflection of that, glad to see I was not the only one that came to a slightly different result and Ravi has learnt that he had our full attention to the details he presented, it is a reflection of his ability to teach
Hi Ravi, I used your link to register Binance yesterday. However, I found that I cannot deposit AUD as it's saying the fiat channel is suspended. Do you have any ideas what's going on here?
It’s a temporary hold given the issues all the Banks in Australia had 2 days ago. This is felt across the board from my understanding but the latest update is that it should be back up in the next day or two :)
Ravi, do us a favour mate.... Stop enlightening the stupid... **Let people buy that one big basket with all their eggs inside. **Let the trolls whinge and bitch and prioritise other things. Oh and thanks for blowing my exact strategy for the past 10 years on TH-cam Cheers 👍🍺
Ravi@searchpropertyau.com.au
Ok
Ravi you forgot stamp duty, a very big cost.
Rent of just $550 p/w for an $800K property seems very low. I recently purchased a 3x2x2 for $595K in Perth and it's getting $580 p/w. Also, being cash flow positive gives peace of mind, but in the long run the real money is in capital growth. I went for a mix of both.
what suburb did you buy in, am also a perth local
I got a property in Perth for $410k in 2019. Rented for $550/week. SoR
You should see Sydney markey
How is that cash flowing yearly?
you might address this im at 4:30 in videa at time of comment, the other major benefit of 2 vs 1 is the robustness, if a renter is lost in one you still have the other for now, instead of cash outage its graceful degradation. (IT high availability concept utilized) edit: this is addressed starting around 7:38
Management fee is rent dependent so higher rent means higher management cost. So costs of ownership is more than double in a 2 v 1 property scenario. 2.5 times is more accurate. Risk is lower with split tenancies losing 1 tenant in a single property scenario though. Best is multiple unit complexes on single title. From 2 to 10s of units. Saves on rates, insurance and you can usually shave the management fee.
I still believe that blue chip properties in affluent subrubs are the best for long terms investment, yes maybe in some year some blue collar arears might out perform but historically in the long run, blue chip always end up better
Thanks for the great Video Ravi… at what point do you start considering the principal payments? Obviously at some point the bank is going to want their money back, what is your position using the above examples could you please do a video on this please?
In case number 1, where you suggest rent to be $550 sounds outdated. There are almost no units out there at the moment that rent is lower than $650/week.
Thank you for the insightful video. Just came across your channel and now a subscriber!
great timely video, was thinking about this the other day
Would be interesting to factor in stamp duty. Also comparing this scenario in similar suburbs would be more fruitful. 12 months data for property seems a bit short and in this example it can show that maybe regional is lagging behind capital cities in terms of the downturn.
Fantastic content and simple math.
Thank you 🙏
Ravi answer my question bro don't disappoint me
Do u pay interst only on the investment property?
Landing onto this video after searching for the exact title. It was definitely helpful in understanding the concept overall but couldn't relate it well to the real estate situation in India.
Also, one suggestion, the handwriting is not easily readable.
Thanks for the video.
Agreed that hand writing is not professional.
Not written with respect.
Hi Ravi
One thing I can't understand why do we need to buy property when we are going to pay double amount once we get rid of mortgage.e.g if I buy a property for $800000, in 30years I am going to pay 770000 interest on it so total will be nearly double. Doesn't make sense to me🙄🤔🤔🤔🤔
🤔
What did it cost to buy the same property 30 years ago…?
Ravi, I have 1 property that i bought a few years ago as a home, I am now renting it out as I am living and working overseas and it is a negative cashflow. But the price has gone up.
Could you help me to use the equity so I can get a second property as I want to keep my home for when I return but I also want to get more houses in the near future in rural towns of Victoria.
Shoot me an email John :) ravi@searchpropertyau.com.au
Hey just interested in these vs house with granny flat or house with potential for granny flat
Mega video thanks for making this so clear!
Awesome video Ravi! thank you!
come on Man even though i am living in PAKISTAN i like watching your videos and the way you categorize all this ideas of personal finance. :)
Thanks Ravi - just wanted to ask about how/when to factor in cost of a buyer’s agent when looking at investments properties - is usually an upfront cost or ??
Cheap properties attract a certain quality of tenants (generally).
Cheap is also different to affordable 😉
Hello Ravi, what if the more expensive property was also yielding the amount? What would be the choice than?
Great video Ravi
Thank you 🙏
I don't believe your figures are correct but the overall theme would be correct
What makes you say they are incorrect Lol
@@PersonalFinancewithRaviSharma rent is usually directly related to price so a house worth $ 800,000 would be rented closer to $ 800 p.w. it would usually be in an area of middle class rates as opposed to the 2 houses going for $ 400,000 that would be in a lower rate district and again the rent being relative to the price so your estimate was reasonable, I do feel the loss on the more expensive house option would be less and the expenses on the cheaper house package would be less, as I did mention your overall theme is still relevant and I enjoyed your delivery and topics but I am glad you were intrigued by my response and humble enough to ask why I had that opinion
@@SGTMARSHALL1 I based this on real examples where the average rental yield was about $500-$600pw. In some areas you get a greater yield but that can also be applied to the cheaper properties.
But as always, wouldn’t be able to cover every property. Thanks for watching 🙌🏽
@@PersonalFinancewithRaviSharma I was about to comment on a similair theme to what Marshall said. You are comparing a property in a capital city vs properties in the regions so of course the rental yields will skew favourably to regional. Would it not have been better to compare both scenarios in regional properties or both in capital city properties to have an apples to apples comparison? Are there not good regional properties available in the circa 800k price range that give similair yields?
@@jskf01 I have to assume the scenario was relevant to Ravi's surrounding areas and thus the prices are a reflection of that, glad to see I was not the only one that came to a slightly different result and Ravi has learnt that he had our full attention to the details he presented, it is a reflection of his ability to teach
nice vid! Thanks!
Cheaper properties give you more options, but really depends on your situation.
The trick is 2 cheaper
Cheapest not better
Hi Ravi, I used your link to register Binance yesterday. However, I found that I cannot deposit AUD as it's saying the fiat channel is suspended. Do you have any ideas what's going on here?
It’s a temporary hold given the issues all the Banks in Australia had 2 days ago. This is felt across the board from my understanding but the latest update is that it should be back up in the next day or two :)
If you pay 800K for a property in a capital city it will rent for more than $550 pw. More like $700 pw.
You will get same rent with one good over two crap
Only one repairs
And
One cgt ect
“Affordable” is not “crap”
More expensive would be better if u can afford
Ravi, do us a favour mate....
Stop enlightening the stupid...
**Let people buy that one big basket with all their eggs inside.
**Let the trolls whinge and bitch and prioritise other things.
Oh and thanks for blowing my exact strategy for the past 10 years on TH-cam
Cheers 👍🍺
LOL! Trust me bud, most people still won't action it.