I think that both negative gearing and cash flow positive will work, just depends on your personal preference.

I was very sceptical about all the theories that “house prices will double every 7 to 10 years” etc when we bought in Sydney 10 years ago. In fact I didnt really care to be honest, we just wanted a place to live. When we bought the house I thought it was a huge amount of money to pay and borrow etc, these days its peanuts and we are only talking 1994 which is not very long ago.

With some renovations to the house the value has more than tripled in the last 10 years. In original condition (unrenovated) it would probably still be worth at least 2.5 times what we paid, 10 years later.

So I guess what I am saying is that I do believe in the buy and hold strategy for capital gains, especially in a major centre of business and industry like Sydney or Melbourne.

I dont see any evidence as to why capital growth in the future would deviate from long term historical averages?

That said, I think my personal preference is CF+
property. I really like the idea of replacing my salary with a steady stream of reliable income. Its something that you can build on over time and quit working as a company slave, eventually, as suggested in the book.

The problem for me is where the hell do you find CF+ anywhere in the Sydney region. Its got me beat at the moment but I’ll keep looking, it must be out there someplace!

quote:

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Hi,
I’m new to the investing game,my husband and I have recently been reading everything we can get our hands on. I’ve looked at certain areas in Melbourne and also on the web, and wondered about Bendigo, but haven’t actually started. What I have seen by Steve’s formulas for working back from the rent to the purchase price to see if it’s positive cash flow, nothing seems anywhere near??? Where do i go from here?

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I’ve read a few books as well, and I’m currently reading Steves book. I cant put it down, I only started it this afternoon and I’m roughly half way through it.

The idea of positive cashflow is something that I’ve always had in mind, and the book is seriously reinforcing this idea. Substantial capital gains seem somewhat uncertain at the moment(?), in my view cashflow is king and it is the goal for me. I agree with the book, you cant go wrong if you have made $$ at the end of the month. []

However the opportunities appear to be non-existant in Sydney, and anywhere within a few hundred km, as far as I can see. Maybe a need to get some glasses, but so far I just cant see where these types of opportunites exist anywhere in my region. So far my search has been limited to residential real estate.

I’ve seriously looked in Cairns, and spent some time there… It appears there are some limited opportunities in studio or 1 bed units for cashflow, in the suburbs of Cairns. But its so far away I would prefer to stay within a few hours drive of Sydney.

Is this just the wrong time to look for positive cashflow? What am I doing wrong? Mostly I am using property.com.au and realestate.com.au to look for opportunities. Maybe I need to get out and “pound the pavement” in real estate offices?

Any suggestions on where and how to look and find opportunities are most welcome. As stated, I have not finished Steves book so excuse me if I am jumping the gun. Thanks and regards to all…