Define 'Cheapie'

Hi folks,

I've noticed that many people on here (including myself!) mention buying 'cheapies'.

Interested to hear what people's definitions of a cheapie actually is. There is no right or wrong answer (I.e. one person's cheap may be another's mid-range or even 'expensive').

Would love to hear from newbies and property investment veterans alike on what their $$$ definition is, for a 'cheapie' (I.e. the actual purchase price).

 

I think this is relative? If the median price of a suburb is $3M, then $1M is a 'cheapie', but if the median price is $500K, then $1M is expensive. If you really want an amount, I will say $400-500K as my cheapest IP is around $400K at the moment.

 

Just look at it in very simple terms what above the ground is sometimes not important ,only the land value and what and how high you can go up..

 

I define it as a property whose value sits well below the suburbs median

 

Haha I've been buying 100k units at 7.8% yield id consider that as a cheapie

 

Sub 200k houses imo

 

So where are all these cheapies people are buying? Reagonal in guessing.

 

We picked up a 2br unit in Rockhampton (Qld) for just over $130k, returning 9% on paper. Thought that was a cheapie at the time.

http://www.realestate.com.au/property-house-qld-koongal-120095105 - This similar one on paper is around 9% @$240pw - BC, rates etc eats into that figure, but still CF+ with depreciation.

Not a terrible investment, have just found a better way of doing things and have changed strategies.

 

Metro Adelaide

 

For me, "cheapie" is an absolute thing, not a relative one.

It's not the difference between value and cost. It's not about getting a $2m house for $1m. It's not the relative difference between high yield or low yield.

It's literally "does not cost much money", regardless of "value".

So I'd define it as anything under $300k, regardless of whether it had good or bad yield. Regardless of whether the same house next door was only $200k and you got ripped off.

 

I bought a well positioned flat in Marrickville (Sydney) a few months ago for $370K. I would call that a cheapie.

 

I consider under $250k a cheapie.

 

Your purchase fits my description. Purchased lower than the suburbs median. Great buy by the way.

 

Yeah, or under 1/3 of Sydney's median at the moment.

 

I like this.

I also classify a 'cheapie' in terms of buying a place at a 'decent' price (may even be above median price), but that has great potential to add massive value.

Eg median price for Suburb X is 650k, and you buy a place for 730k, but it has the potential to create 450k in value.

 

Cheapie is when the tenants drive into the driveway in a VS Commodore or worse, and park the other car which is the wrecked version of the same - or a Falcon - on the front lawn for the rust to eat.

 

One of my past tenants had so many holes in the car that roots and grass was growing on the mat on the floor...im serious.

 

Personally anything sub 200k when talking about cheapies in general.

 

I guess if you can find a cheapie suburb like this, and you manage to buy a decent house and get a decent tenant who doesn't have an automobile graveyard you should be doing alright.