NSW FHB first mistake?

Hi all needing some general advice on my first property whether to keep or sell?

Bought last year for 169k (studio part of a block of 30) in wollongong.
Rented at 180 pw
Borrowed 135k
Weekly cost
130pw mortgage (noi)
15pw property manager
60 pw strata + water

Seems there is no passive positive cash flow unless I build equity but equity would be best invested in a place returning 7% or higher

I'm 36 single have moved around my whole life and am happy to travel to fix up a property to rent out or flip (I've 20 years building exp so can take on the rough stuff)

I've been watching these forums closely and tbh has given me the inspiration to go out and find property on my own.

The question is do I just take my 70k equity out or sell the whole studio and run?

 

What 70k equity?

whats your expectation of future cashflow (rent rises, but look at that body corp fee) and capital gains?

 

Sorry I should have stated I've built up 70k equity in it , if I took that out I'd have no equity and owe 135k on the property.

My goal is to generate as much cash as poss to go out and buy fixer uppers while I'm still young (ish)

Having just 70k to my name limits me finding a place (regional) but if I sold the property I'd have 70k plus another 50k or so from the sale. Enough I think to reap long term benefits.

New to this as you've probably guessed.
I guess what I would benefit from keeping the studio is long term cap gains over say 5 years and have to ride out the storm of keeping a happy tenant and keeping up with all the bills. I don't think rent will rise significantly anytime soon

 

I'm a bit confused if you're very handy and young why did you go for an OTP studio as your first?

 

Interest on loan is what $80 a week
Depending what strata covers. Rates, insurance etc those number look OK to me/paying it's way

Would a low cost sweat equity Reno improve rent?

 

What does this mean? You have a loan of 135k. 70k of equity implies it's worth 205k?

Anyway, no way you can borrow 100%. Even if the equity is 70k, accessible equity is maybe 25k.

 

260 per fortnight/ or 130pw on the loan
Less than 25 squares very small so only limited to a couple big lenders, paying just over 3% on principle and interest.

If the numbers stack up I'm happy to keep it but will vastly limit the stock out there to buy and Reno with 70k

If there's sub 50k-70k 2/3bdr houses out there I wanna know

 

I was living a a boat the last year or so wasn't on land enough to Reno a place

 

Fair enough.

 

Take the 70k out if you can earn more with it than the 2k you are saving on interest. 135k should cost you under 3k in interest after tax, while you should earn over 5k after the cost you mention, if other costs are not too much it should cost you nothing to hold and make you a few dollars. 5 years is not long term hardly even medium term. If cost go up faster than rent you may want to consider selling. The whole point of property is leveraging using equity, if you want to pay it off selling maybe a better option as returns are poor with property without leverage.

 

Sorry try to be a bit clearer, I confuse myself at the best of times
I bought the studio for 169k
Had a 20% deposit from memory
Had to pay the bank 135k
Have paid into the mortgage 70k in the last year (70k is accessible)

I'm just posting really to see if ppl think this property is worth keeping given all the strate and fees involved.

 

Might want to start all over, to be honest.
Go to a mortgage broker and see what your borrowing capacity is.
Have a plan. Your building skills should be a huge help to you.

 

Can't get a loan as I've been out at sea for a year, hence me trying to free up as much funds as possible for a cheap house somewhere.

I wish i knew about this forum a year ago I might have some idea where to start hehe

I'm looking to get into places like kambalda wa or broken hill / carnarvon etc on a budget. If like ruby Tuesday says property needs leverage then I think I'll sell up and start again.

What a rollercoaster year it's been!!

 

Unless Kalgoorlie is really booming which it isn't. As a old Kalgoorlie dweller I would stay away from Kambalda

 

Do you have an income now?

 

Yes
Would need to be in full time work for 6-12 months I'm guessing for banks to touch me.

By that time I think a lot of regional in my price bracket would be extremely hard to find

 

Also don't forget LMI, it seems like it might be very useful in your situation.

 

Kalgoorlie seems to have Low vacancy rates, and good rental return yields

https://www.realestate.com.au/property-house-wa-boulder-135565106

Something like this I feel would be hard to have a negative outcome.

With 2-3months work it could return 300+per week I'm sure.

What's not to like about kambalda shogun?