Other $200K IP - Where would you buy?

Just looking for a small IP with a decent yield. CG isn't terribly important. Looking for my elderly parents who are looking for good yield to add to their retirement cashflow.

I know its a broad question, but keen to hear if anyone's been looking/purchased at that price point and if there's any towns/regions they reccommend.

 

Is it worth the risk? Compared to say an index fund?

 

I was searching about 6 months ago for sub 250k in Rockhampton, Mt Gambier, Horsham, Stawell, Kerang, Millicent, Murray Bridge.

 

Consider maintenance and repairs, I can’t imagine the positive cashflow would be that great from something this cheap. A couple of years of positive cashflow can be wiped out easily from one repair or maintenance issue, and believe me it happens. Without growth, is it really worth it? Do your elderly parents want the headache of dealing with all that comes with owning property?

As mentioned above it would be worth doing some research on index funds to see if they suit your situation. Not advice.

 

$200k cash? ETF

 

As other's have explained why would you take the risk as 200k will not take you that far and will come with a variable list of problem's..
Look at the price of the top 6 asx listed bank's as 200k with the present future ?? Dividends per half year not advice in any way ..

 

Something like HVST may be better would give more net income, probably more CG, more liquidity, less entrance and exit costs, franking credits, less headaches less expenses, wont need a hotwater service, painters, plumbers, property managers and electricians, burn down or flood. 120k in HVST on past performance would give a growing $750 a month income,plus any franking credits, the other 80k could be invested in something to give a little more growth and maybe a faster growing dividend perhaps 60k SOL and 20K BTI and DDR, that may amount to about another $250 a month income. 80k in SIQ based on trailing yield would give another 10k a year . That alone may be better than buying a 200k house house.

 

Take a look at Northam in WA. It is 100kms from Perth.

A rising tide lifts all boats.

 

I echo most of the other posts. I can't think of a good reason to buy a 200k property (will be a small regional a fair way from a capital city) for cashflow, as opposed to investing the 200k into ETFs/LICs/REITs. Especially for elderly people. You would easily be able to get a 4% fully franked dividend or a 5-6% partially franked dividend in shares - large companies such as the banks for example. No stamp duty, no exit costs, no hassles and a better net return! If you did find a property for 200k and it rented for $250/week ($13k per annum) you are still looking at about 6k in expenses (PM fees, rates, water charges, insurance, repairs and maintenance) - so a net 7k return on your money (net 3.5%). And that is at $250/week which would be a very good rent based on purchase price. Plus what if your parents wanted access to some of the money for medical expenses or something else? They can't just sell off 25% of the property to get 50k cash.

 

Now there is some quick dividend growth, latest dividend is 40% higher $120k shares of HVST have would have given $1077 dollars dividends this month, can a 200k property net that, $200k of shares would give $1,800 this month.

 

I have 3 in stawell. Bought for all under 200k they all get 300 per week in rent average 6% property management. Definately better yields than most shares even including the once a year aircon, roof leak or, plumbing expenses etc

 

i have one in hamilton vic but i was lucky with the way it was purchased for last year 215k now valued at 330k. and currently tennanted at 260pw which is going up again end of year. was lucky but did my research!