Any tips on a good formula for a cash flow positive investment property. Obviously less out goings than incomings can any one elaborate on their secret…….
You want to know the secret?….
Yeah baby, set the controls for 1997. Shweeet!Or just buy when house prices are cheap and rents high, as opposed to today with expensive houses and cheap rents.
Cheers, F. [cowboy2]
Look at alternatives strategies.
I was fortunate enough to start our wrapping company back in the mid 90's providing Vendor FInance to clients who could not get traditional style funding.
Sure things have changed but the mechanics havent and the demand is as strong today as it ever has been.
Richard Taylor | Australia's leading private lender
This has been mentioned before (by me) on this forum;
POSITIVE CASHFLOW AFTER-TAX.This means that after you have factored in:
the rent,
the tax return and
the depreciation, or "on-paper" deductions, (must be built after 1987).The property returns a positive cashflow after all outgoings; including the loan. It is after tax, so there is no tax to be paid.
Also include that the property has good "add-on" value in the form of renos, or subdivision etc.
You also need to go with an interest-only loan, and re-invest your tax returns back into the property every year, as well as use regular debt reduction as well.
Things like location, floor-plan and condition also add to the appeal for tenant and buyer demand if you should ever wish to sell, but the main factors are above.
These properties are still out there everywhere, but you still need to look harder than you used to have to.
Foundation……haven't we had this discussion before old china? Too true!
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