Forum Replies Created
Hi,
For these positive cashflow properties that have no/low capital growth. Why would an investor purchase it if vacancy and bad tenants can be an issue. Eventhough theoretically you do get a good return, but you still need to consider if you don’t get rent or damage occurs. Also, if the property is too old, there is no depreciation you can claim.
Hi Mike,
So your purpose for the positive cashflow properties in rural areas is mainly for income generation, not really for capital growth.
This was my thought as well, but how much income from a single positive cashflow property is required to make the investment worthwhile. It would be different if your making $50pw for a $100k property versus making $50pw for a $200k property. Of course you can up the income if you wrap it.
What would be best, principal+interest or interest only loans? For maxing income, I would imagine interest only would be best, but you would only be able to do this for 5years unless you refinance (which will cost money).
In terms of your strategy, how many positive cashflow properties can finance the negative cashflow property? I know that it would depend quite abit on the property, rent, and personal income. It would be great if a postive cashflow property can finance a couple of properties, but chances are it might be the otherway around where you have a couple (or more) is paying for one negative cashflow property.
Hi Steve,
Do you mean you try to get $50/wk passive income for properties you invest in anticipating for cap growth, or are you not too worried about the cap growth and investing for the tenant to build your equity for the property?
Hi Hilary,
Your property of $130k returning $230/wk sounds great. I would imagine you have done your other due diligence. How did it measure up?
Hi,
Just a question. Alot of these property in the rural areas that look like positive geared, look pretty run down and their rental prospect look questionable. It could be possible for the property to be positively geared if its always rented out, but if it is difficult to rent out, then the numbers would be different.
What are people’s thoughts on this? I guess most people would advise to wrap it rather than rent it out.
