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Too good to be true?

Discussion in 'Real Estate' started by Trickytrend, 15th May, 2015.

  1. Trickytrend

    Trickytrend New Member

    Joined:
    15th May, 2015
    Posts:
    1
    Location:
    QLD
    Hi all, I am new to this forum and would like some feedback. My dad used to tell me if it's too good to be true it often is. I have just made an offer on two over 55's units (freehold) that are one bedroom, and are renting out for a combined incomme of $430 a week. With a purchase price of $145,000 including costs giving a gross return of 16% and a nett return of 9.6%. Now they are in Slacks Creek in Brisbane, don't flood, property is really well kept and has over a 95% tennancy rate.

    I realise that capital growth will not be good (I am purely looking for a strong long term return for my SMSF). What am I missing? Is there a fault in my cunning and devious plan? Thanks in advance.
     
  2. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    Difficulty in getting finance and difficulty in selling.
     
  3. Waimate01

    Waimate01 Well-Known Member

    Joined:
    26th May, 2008
    Posts:
    157
    Location:
    Sydney
    Your father was a wise man, and he'd be proud of your caution. Check the paperwork - it may be there are substantial ongoing costs for various expenses and management fees, or it may be such fees are very low and reasonable but subject to arbitrary changes and you're strapped in for the ride. There'll be traps and catches. Just keep looking until you find them. They'll either be in exceptionally small print, or exceptionally large print.