Hi guys,
Just read some fantastic ideas on making neutral cashflow properties into positive like-
pay more in deposit and lower the interest rate
claiming purchase expenses at tax timeI am looking madly and finding a few ‘nearlys”
and am only new so I would be very grateful for more ideas.(read lots on increasing rents)Please help everything I find is $20,000 too much
I know positive cashflow is to be made not found
There must be a ton of other ways.Thanks guys
Kind RegardsPaula
Paula,
Don’t forget depreciation. This could be significant for a fairly new building.
Also, Interest only loans help.
“everything I find is $20,000 too much”
Try offering $20K less!
As you have mentioned add value to increase rent.
hrm
Minor cosmetic renovations can up the rent to tip the property into positive territory, also creating another bedroom and maybe even supplying something like whitegoods or Foxtel for a price that’s more than the cost can help with cashflow.
Getting new tenants at the market rate is good too, but like HM said offering $20k less and getting an interest only loan is one of the best and easiest ways to help with a properties cashflow.
I’m sure you’ll get heaps of suggestions, good thought provoking post aswell…Good Luck…G7
Hi G7 and hrm,
Thankyou for your great advise, you have sparked some other questions if you could help me with I would be very appreciative.
Offering $20,000 less- is this considered lowballing or is that common practise?
You mentioned depreciation- how old does the building have to be and how would I work this out?
Could I claim the purchase costs at tax time?
Thankyou once again I am looking forward to your replys.
Kind RegardsPaula
Paula,
Answers:
Offering $20K less, you don.t ask you don’t get. Make the offer and see what happens.
Depreciation. 2 types: building @2.5% per year, and fixtures like floor coverings, cupboards, appliances, light fittings, swim pool, security etc. variable rates.
Perhaps you could PM Scott at “Depreciator”, he’s a member on this forum and I have used and recommend his company for setting up depreciation schedule.
Claiming purchase costs at tax time: I am not a 100 % sure but I think its over 5 years, but another Q that Scott can answer. Good luck.
hrm
Just read some fantastic ideas on making neutral cashflow properties into positive like-
pay more in deposit and lower the interest rate
I never “get” this [blink].
How can a higher deposit turn a neutral cashflow property into a +CF one?
I mean, the deposit is YOUR money- I always thought that a CF+ property was a property that gave you an income (even if it was just 5 cents a week)based on the whole purchase amount , not just on the amount you borrow. I thought it was all about yield.If that was the case, then basically, ANY negatively geared property could be called a CF+ property as long as you pay a deposit big enough so that the interest you pay on your borrowings will be less than the net rental income.
Am I missing something?[confused2]
Celivia
I’m with Celivia.
Plus, it doesn’t seem like an efficient use of funds. The extra deposit you put in to make it appear +ve could be otherwise put towards a deposit on another property. I suppose it depends on your plan, and whether you intend to buy more properties, in which case some investors would normally maximise their leverage by putting in miminum funds.
Wake
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