Cash Flow Positive Property – How??

No one thread can answer your question properly.

You need to get hold of decent investment books and read, read, read, read and then read. If you use the search button on the left under Books you’ll come up with a great review list. Someone else might be clever enough to have that link?[blush2]

I would suggest you spend quite some time reading before you venture into a purchase. The more you read the more you will learn and things will suddenly be much clearer.[grad]

Redhaven

Hi Khalida,

As Eric indicated a cashflow property exists when income exceeds all expenses. Some people also include (others don’t) tax savings that can be available through depreciation.

A property shouldn’t be considered for cashflow alone – there are other factors to be considered when selecting property. Also do not neglext opportunities to improve yourcashflow after purchase and/or for rent increases to incur thus making the property cashflow positive at some stage in the future.

When buying a property you will need to have about 20% for a deposit and a further 5/6% for costs. These funds can be drawn from savings (a slow process) or from equity or from a benevolent family member/partner and so on. The 20% can, in some instances, also be reduced to considerably less if you are prepared to pay LMI.

As for the booklist suggested by Red – here it is
https://www.propertyinvesting.com/forum/topic/6845.html

Derek
[email protected]
0409 882 958
Property investment advice and researched property in quality locations available.

Hi Khalida,

There are numerous ways to aquire properties which can become cashlow positive. With the market the way it is at present it is very difficult, with rare exceptions, to find properties that are CF+ to start with. As Steve McKnight states in his books that these properties are “created” by adding value in some way or by developing/subdividing, or wraps, for example. Each requires its own understanding and expertise.

I would have to disagree that the only purpose in buying a property is for capital gains. If that was the case then Steve and others would not be in the position they are now. Certainly capital gains is great, and some people do invest for that alone, but others invest quite successfully without reagrd to capital gains, which is unpredictable and not guaranteed over the short term, whereas cashflow is predictable in the short term.

Keep learning javascript:insertsmilie(‘[thumbsup2]’)
Thumbs Up [thumbsup2]

Best wishes

pr

Hi Dazzling,

You confuse me. [biggrin]Commercial or residential?

Derek
[email protected]
0409 882 958
Property investment advice and researched property in quality locations available.

[blink] KHALIDA I TOO AM FEELING THE SAME WAY & HAVE JUST POSTED SOMETHING SIMILAR TO YOU ALTHOUGH I AM IN VICTORIA. KEEP LOOKING & LET ME KNOW IF YOU HEAR OF ANYTHING INTERESTING IN VICTORIA & I WILL DO THE SAME FOR YOU IF I SEE ANYTHING IN QUEENSLAND.

GOOD LUCK

Some lenders have reduced the LVR to 60% or over to attract LMI now so dont be to upset if you get a little surprise.

All you can hope for in SEQ now is a property that is the right price so when you do a reno it pcks it up to at least 7.5%, this with a depreciation schedule covers most costs if not all.

With the purchase pricing on units/townhouses taking a $20k hike in the last 2 months I’m finding it increasingly hard to still get these bargains for my clients.

Good luck

DD

PS146 Certified Financial Planner and Buyers Agent
Don’t sweat the small stuff,and it’s all small stuff!!

Khalida, if you want to prosper you need to purchase income producing assets. Real estate investments in Australia has been synonym of “negative gearing” for a very long time, in normal terms means to buy liabilities for the fringe benefit of transferring the loss to another source of income.

Cash-flow positive is the opposite to negative gearing but both are accountant terms and not investors terms. When an investor purchases an income producing asset he does so with a dual purpose, to purchase an asset that will appreciate in value over time and that produces income in the process.

In view of the increase in market prices, due largely to investors demand, regional and rural residential properties in general do no longer fit the criteria in the short term, that does not mean that it is not possible to score the odd opportunity, it just isn’t that obvious anymore, andthe risks have increased.

Yet residential is not the only income producing asset there is. You have commercial property, industrial units, hotels, boarding houses, not to mention the possibility to purchase the commercial operation together with the real estate that goes with it. Also the option of increasing the value of real estate by renovations, extensions, subdivision, turning residential into commercial and many other value increasing exercises.

It goes without saying that all of the above are a higher, much higher risk operation than simply purchasing your average suburban home and hope for the best, there are also increased difficultiesto find funding for it.

Yet income comes from adding value to other people’s life, in other words there is no such thing as something for nothing.

You will have to get wet to catch fish, if you don’t know how, I suggest you find someone that does and is willing to share the risk and subsequent rewards.

If you add up the income of your 5 closest friends and divide it by 5, you will have a figure equal to your income this year.

http://www.chosen4u.com/?ace

“What you want in your life occasionally shows up…
what you must have… always does.” . . . . . Doug Firebaugh
May God Prosper you.[biggrin]
Marc