Yes dead right Ben,

Anywhere where you can get more than one income stream from the one purchase/piece of land you have a far better chance of being able to achieve higher yields and positive cashflow.

In fact in my portfolio, i only have one single tenancy property (3 bed house) all the rest are either houses with minor dwellings, or even better still, my personal favorite – blocks of units/flats, 4 x 2 beds, 10 x 1 beds, 11 x etc.

The beauty with these is when you increase the rent by $30 per week, over all 10 units in the block it equates to an annual rental increase of  $15,600, try and do that with one 3 bed house!

Of course a block of units doesnt get valued the same way as a home. But it gets valued on Cap rate (Capitalisation of the rental income) the same as a commercial property does.

So assuming a yield/cap rate of 7.5%, by raising the rents by $30 pw over 10 units you have also increased the value of that property by a massive $208,000.

You can see how this can get quite exciting very quickly, particully when you buy a block of units that is currently under-rented, and all you do is lift the rents to market rate and get a whopping increase in cashflow and gain in value.

I hope i have made some of you think beyond the stand alone house

The best advice I could give is to get educated so that you have the ability to make your own informed decisions, rather than rely on bad advice from others. And remember that "the most expensive advice you can get, is free advice"

You need to be able to perform proper due diligence, and complete some decent financial forecasting before comitting yourself to any property purchases. And never buy a property unless you have at least one sound exit stradergy if your initial plan doesnt play out.

Even if you are unable to secure finance due to your history, you can still 'trade' property and make good money without the need to get mortgage finance.

The small cost to educate yourself is nothing compared to the numbers you are dealing with when purchasing property. It is a small investment in yourself that will pay you back forever, and more importantly help avoid very costly mistakes like you have already experienced.

Yes, that is absolutly true, but the problem is can you afford to hold it long enough for that to happen, and the other problem is, you are very limited to the number of those properties you can buy, as you run out of debt servicing ability and the ability to keep qualifing for bank finance.

Whereas if you purchase properties that do produce a positive cash flow from day one, you do not run out of borrowing power and can purchase alot more property in a shorter space of time, which will obviously lead to you being worth far more down the track.

Others have pretty muched covered it all here, and hit the nail on the head about checking market rental levels etc, and that the 2 year guranteed rent may be soley in place to make the investment appear attractive to get them sold, and in fact may being drip feed back to you from your inflated purchase price.

I never invest in a property that i dont have control of the property and the rental income. In this situation the occupancy and rental level is dictated to you by the hotel management company, and you cant do anything about it.  

My advice is keep well away from this type of investment. Stick to properties where you have all the control.

Hi there Suchy,

As a few others have already mentioned, there are several different ways to skin the investing cat so to speak, all have their place.

But at the end of the day, it is very hard to beat long term buy and hold type investing, done correctly this is the way to long term sustainable wealth, that can be built and passed down thru the generations.

It is pretty hard to go wrong if you buy well located income producing property, even better if you buy well (at a discount) and are able to get a surplus positive cashflow from day one or after doing some renovation work etc.

Trading is ok, but you only make money the once and you have to keep doing the deals to make money. My suggestion to people is that if you are active in the market as a buy and hold investor, you will inevitably come accross deals now and then that you dont wish to purchase yourself, but there is still a dollar to be made by trading it on to someone else. This works out well, as you end up with big chucks of money to use as deposits for more buy and hold properties for your own portfolio.

Right now is a really good time to start, as there are plenty of oppuntunities around to pickup good properties at reasonable prices. There are a few key things that you need to understand tho, to stop you falling into the same trap that many newbies did towards the end of the last property cycle.

Best advice i can give you at this stage, is before you invest in a property, invest in yourself – It will repay you forever!

I do believe you will NOT regret your decision to keep them all. Good on you!

Be very careful who you take advice from, seek out a specialist property accountant, and get them to offer advice on the type of entity/s that are appropreiate for your own personal situation.

Dont penny pinch in this area, as it is far easier to get this set up correctly now at the start, rather than try to fix it up down the track once you have bought 10 properties and didnt have it structured correctly to begin with.

Hi Guys,

We have just sent out a Property Alert email to our database, advising of our latest Property deal. Which is cash flow positive pre tax by over $4,000 p.a. and in a excellent growth area. Available via assignment.

See the email online here http://eepurl.com/c_JR

Yes there sure are currently some excellent opportunities to purchase quality properties, which if bought well can offer some pretty good yields. We just contracted two such properties yesterday.

Have actually just come back from inspecting one of them, and we are amazed how good this property is, and the fact that it is one of the best capital growth areas in the City, and it will be positive cash-flow pre-tax