All Topics / General Property / Positive Cashflow

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  • Profile photo of zimbyzimby
    Member
    @zimby
    Join Date: 2009
    Post Count: 40
    November 5, 2009 - 10:11 pm

    Howdy

    I do appologise if this has been covered before, i did try using the search function but didn't find anything solid.
    JUst bought steve's book and am Half way through it, seems very logical.
    I see this was published in 2003, he speaks and aims mainly towards positive cashflow property.
    This seems all common sense to me, he speaks about buying houses up until 2003ish.
    So my question is Positive cashflow properties, are they still around with the housing market the way it is?

    I'd feel more confident looking knowing that 2/3/4 people out there on the forums have secured such properties.
    The more I look, even with Interest only and the best possible interest rate that weekly rent will barely cover weekly loan repayments.

    I may Have to combine two strategies to achieve +cashflow, value add then rent?
    I am begning to see why there is so much negativly geared property out there.

    Thanks again for the help.
    Oh and what does everyone think is going to happen to the market after the FHOG drops back?

    Cheers

    Denis 

    Profile photo of ducksterduckster
    Participant
    @duckster
    Join Date: 2004
    Post Count: 1,674
    November 6, 2009 - 3:58 am

    what you need to be mindful of is rising interest rates, as it is a big expense in buying an IP.
    So if Interest expenses go up you will find it hard to find a positive property.
    Income = rental income – interest – council rates – water rates – insurance – repairs + (tax return deduction for building depreciation)

    However you need to take also into account building write off depreciation at 2.5% on new buildings. However capital gain increases each year you claim this depreciation.

    Have a look at Cameron Bird – Google Search – for an example of this type of depreciation being used to increase cash flow but you need other wage earned income to increase tax so depreciation can be used.

     
     

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    November 6, 2009 - 4:26 am

    There are plenty of +ve proeprties out there, but ususally they are in 'bad' areas and suffer from lack of capital growth. These are not worth touching.

    ideally you will find one in a major city or other area with growth prospects. There are still some around in Sydney for example – but maybe not for long with the rate rises.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 3 posts - 1 through 3 (of 3 total)

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