I have been looking to get myself started with a couple of cashflow positive investments in Queensland. I have a healthy cash deposit to get started with but I am finding it almost impossible to find any properties with positive income, regional or suburban. I am beginning to think that the recent boom over the last few years has meant that unless rents rise that we will not find any cash flow positive investments here. Am I alone in my thoughts or is it that I am not looking hard enough or in the right locations ? Any help please.
Hi Damian and Tam,
You are right in that the recent growth, and the timelag in rents increasing, has resulted in rental returns dropping. This means that in general terms ‘off the shelf’ positive cashflow properties are harder to find than they were previously.
Another option is to see if you can identify a niche or missing attribute with the property that can be acted upon to make it positive.
Derek
[email protected]
0409 882 958
Property investment advice and researched property in quality locations available.Damian and Tam,
Derek is absolutely right, it is more difficult to find cashflow positive properties at this time, but certainly it is not impossible.
I guess it boils down to your level of creativity and determination. IMO a creative mind is never disillusioned, it is too busy thinking up new ways to do things and so has no time to feel down!!! [biggrin]
Cheers,
Jo
I am also currently looking in SE Qld and am finding it difficult to even come close to a cash flow positive property however every now and them I get a glimmer. I guess this is what keeps me going. Can someone please explain to me what they mean by “you need to get creative” to find a cash flow property. I am guessing this means to add value to a property and increase the amount of rent charged? Am I on the right track. I would appreciate if someone could assist.
Also, for all you accomplished investors out there. When looking for a cash flow positive property do you only look for properties that are currently tenanted out or do you go by the likely weekly rental income and look to find a tenant asap. I would appreciate your comments.
Thanks, Nads73.
Originally posted by Nads73:Can someone please explain to me what they mean by “you need to get creative” to find a cash flow property. I am guessing this means to add value to a property and increase the amount of rent charged? Am I on the right track. I would appreciate if someone could assist.
Assist in what exactly?? It’s about using your imagination; doing what you think could help add value (as you correctly understood it). Examples like a repaint, updating tired/dated kitchen cupboards, cosmetic improvements that will appeal and attract potential tenants.Also, for all you accomplished investors out there. When looking for a cash flow positive property do you only look for properties that are currently tenanted out or do you go by the likely weekly rental income and look to find a tenant asap. I would appreciate your comments.
Not just cashflow positive chasers look for the criteria you have detailed. Investors on the whole tend to look for properties that will rent well and in which prospects are good, evidenced by researching the current rental market of the given area of same.I don’t think it really matters much whether an investment is currently tenanted or not, but if you want to make your repairs tax deductible it is best that the property is currently tenanted when works are conducted. Certainly if the property comes with tenants onboard great (provided they are agreeable to the investor) if not, you may need to ask why it is vacant and how long you anticipate it will stay that way; that is, is it in need of repair to make it tenantable?? what are vacancy rates like in the area (and/or for that type of property)?? and so on.
All of this has a bearing on your strategy. If you are predominantly ONLY focussed on cashflow then I guess you may well not be phased about anything else aside from rental yield, after all, that is your source of cashflow, but you will need to consider other expenses that will impact the net amount in your hand (ie. council/water rates, land taxes, insurances, loan repayments etc).
Hope this helps,
Jo
i found Steve’s 2nd book to be a bit more ‘Dolf deRoos’ in style..look for solutions to problems.
interest rates will undoubtably rise in the coming months and you will have to think creatively….
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorThanks redwing and Jo for your comments. Jo thanks for your confirmation that I was at least on the right track. I will let my creativity juices start to flow!
I would have a look at Cairns. 1 bedroom units are going from $85,000-95,000. Rents are from $130-$160 p/w. Not meeting the 11 second rule but not far from it. At the higher end of the market, new units are being built every where, so in a few years time the market will be flooded but at the bottom end of the market where rents are more affordable, the market will continue to grow.
Last week it was stated on the local news that new figures released showed Carins will grow faster in the next 20 years compared with SE Queensland.mk2r
interesting call. my last visit to cairns was about 18 months ago to catch up with a mate. seems they cant biuld enuff apartments to meet demand, or are they getting ahead of themselves. not sure of the unemployment rate at present.
have you looked into buying something a little bigger in some of the inner sub. such as westcourt, and directing it toward tourist trade though an agent. possibly at a higher return? [hmm]cheersg. granland
In regards to Westcourt there are a few streets that you wouldn’t want to invest in, undesirables living in the same street. I looked at this 2 bedroom appartment in Westcourt for $85,000. When I got there the complex had broken windows through out and a car which had been stripped in the yard. The tenants were drunk when I conducted my inspection and the place was a mess. If I was going to buy the whole complex and do it up it would have been fine but buying only one or two appartments in the complex, you would’ve had a tuff time trying to attract tenants.
Alot of the one bedders in Cairns are under 50m2 but the markets there for them. The last few months was meant to be the off season but the vacancy rates are alot lower than pervious off seasons with such a high demand.
can someone help? I was hoping to invest in my first property soon after finishing my readings and educationg myself a lot more. Now I will have to pay a higher rent than I am previously paying myself and wonder if it would be better to use some of my savings (around $23,000) to put a deposit on a place of my own (looking at around $180,000)??
Steve suggests in his home study guide to find an investment partner. Is there anyone who live near the Gold Coast interested in joining my on the journey?
Thanks
samjamessorry I have not replied to the sender but I cannot find how to post a message. Help??
Thanks
samjamesIf you are finding property with a +CF hard to find in SE Qld qhy not consider a couple of wraps.
That way you will have you cash flow.
Cheers Richard
richard at fhog.com.au
http://www.fhog.com.auThere is no such thing as a problem.
Just a solution waiting to be foundRichard Taylor | Australia's leading private lender
Originally posted by Damian and Tam:I am beginning to think that the recent boom over the last few years has meant that unless rents rise that we will not find any cash flow positive investments here. Am I alone in my thoughts or is it that I am not looking hard enough or in the right locations ? Any help please.
I think bubble is the correct term. Plenty of CF+ to hit the market in the near future. .25% has mugs, err “investors” needing their Brown Trousers. A bit of patience will see large rewards.
Air goes in and out. Blood goes round and round. Any variation is a bad thing
Torachan – I hope you’re right. Patience isn’t my strong suit, but I’ve been living by the motto “good things come to those that wait” for sometime now, all the while building up cash reserves.
There are some signs that things are on the turn, but they’re pretty subtle in my neck of the woods. Bring on that second .25% rise, I say!!
cheers,
CarlinGuys the best way to get cash positive props in SEQ is to buy a townhouse in an area where the rents are quite higher for freshly renod properties, isolate the cost of reno and then get on with it. One of my clients bought for $107k a 2 bed townhouse and renod for $6k. The rent went from $125/wk to $160/wk in a week of reno.
So with 107k/$160.00 rent you are 50c off 7.5% gross. In 6 months put the rent up $5.00/wk and bingo on the money. This is one example of which there are many. the API mag is doing a reno special this month coming. The reno kings and some guy called DD gave info for the article.
Do the reno, get better cashflow. Its not too hard if I can do it.
DD[build]
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!
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