Hi all
I'm a new investor. I'm having a dilemma, the properties that i can find that have potential for cash-flow have little prospects for growth in value. the properties that i can find for growth have little prospects for positive cash-flow. If i go down the road of buying properties for growth im gonna hit a wall at some stage and not be able to borrow more because i am putting all my money into the properties to cover the mortgage. if i buy properties with cash-flow and little or no growth I'm also gonna hit a wall and not be able to get more finance because the equity is not there.
Please give me your thoughts
Pete
If you can't carry neg cashflow, and still want to invest, you need to look more to cashflow properties first, with cap gains second.
There is nothing wrong with that, and if you can maximise the return with 'add-value' and depreciation, and practice regular debt reduction and re-invest the profits (tax returns) into the property, then you can still do very well.
It has been shown in numerous comparisons between cap growth v cashflow properties that at the end of the day you will still be quite wealthy after a few years whichever you choose.
Keep your mind open to all the factors and possibilities and you will start to see the type of properties that will fit the criteria I mentioned.
Investing should be fun; if you are carrying a heavy burden in the form of neg cashflow, you will get sick of it very soon and may drop out alltogether.
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