I saw a post on this forum not so long ago which was posted in 2006 that is talking about +ve cash flow properties in the US.
https://www.propertyinvesting.com/topic/4385123-usa-positive-cashflow-properties/

This is 2 years before the financial crisis. So the US has been full of +ve cash flow properties for over 8 years now… where are all these +ve cash flow properties coming from?

I am not trying to be negative and I believe that there are +ve cash flow properties in the US but here are some of the reasons that deter me from US property.

People are reporting 30% gross yields in the US. I wonder why the tenants don’t borrow (even at 10% interest) and buy these properties instead of renting. An example I saw was a property that cost $50,000 and was being rented out for $300 per week. Borrowing at 10% would cost the tenant less than $100 per week in interest. 1/3 of the rent. Seems weird to me why they would pay these high rents and not purchase the properties.

One reason could be that banks won’t lend to them because they don’t meet their lending criteria. That would be a worry to me. How can they afford $300 rent per week when the bank thinks they can’t afford $100 interest.

Maybe the US banks don’t lend for these properties because of whatever reason they might have. So as an Aussie you will need to borrow locally by using cash or equity (I doubt that Aussie banks will lend to buy US properties).

So essentially you are helping pay off US debt or transferring it to Australia.

Also why would someone sell an investment that pays 30% yield?

Bennytee wrote:

Agreed, on another note (not trying to be negative) I don’t think I would want to tie up 42K in most of the properties that have been listed, not sure you would get it back easily.

Actually I would prefer to tie up my money in Australian properties than in US properties that US investors don’t want themselves.

Bennytee wrote:

Dirranbandi has population of 437 people, although it positive cash-flow, in my experience the rent and value will most likely be the same 5 years from now.

That’s 9.2% yield for 5 years. Doesn’t sound too bad to me even though these properties are supposed to be examples only and not investment advice.

Just out of curiosity. How much capital and rent growth has there been in the US in the last 5 years?

None of the other members want to contribute to the list?

http://www.realestate.com.au/property-house-qld-east+innisfail-116014499

Vacancy: 1.7%

Spend $5,000 and rent it fully furnished for at least $300.

• This reply was modified 10 years, 6 months ago by  superAndrew.

I development the application for my own use but am working on a more user friendly online version. Can’t tell you for sure when it will be ready. I am in the process of doing a property development and haven’t had much time for anything else.

Use this spread sheet as a guide if you don’t have your own:

http://www.passgo.com.au/investment-property-analysis-tool.html

with these inputs:

Property value (1) $210,000
Deposit (2) $42,000
Rent p.w (3) $280
Capital growth rate (4) 3%
Inflation rate (5) 2%
Interest rate (6) 5.50%
Income tax bracket (7) 30%
Property expenses (8) 25%
Purchasing costs (9) $0
Borrowing costs (10) $3,000

Property expenses are estimated at 25% including management fees, etc. (see the notes section)

Sorry Engelo, can we please use this thread for examples of Australian positive cash flow properties that are currently for sale only? There are numerous other threads on US properties.

There have been a lot of positive cash flow US properties for a few years now. I also agree that for established Australian Investors they could add value to their portfolio.

I personally don’t know much about the US property market and economy. At least not enough to make a confident prediction of the market and therefore to commit in investing my money. I also never invest in a market that is generating a lot of buzz. But that is just my personal preference.

Here are two properties that are positive cash flow:

75 Simpson Street Somerset Tas 7322

55 Martin Street Wynyard Tas 7325

Negatives are that it’s located in Tasmania and capital growth will be minimal.

If anyone is interested in testing the tool PM your email address and I will add you to a list. Alternatively just keep an eye on this forum. I will announce on here when the online version will be ready.

Thanks Jamie :)

Am trying to generate a discussion and get some more info from the members:

• Whether they have come across something similar before (I couldn’t find any similar services, except people that would find properties for you)
• Whether it would offer any benefits to established investors who already have a current system in place and not just be a “magic” tool for starter investors.
• What people would be skeptical about and what features would they like.
• And any other info that can help me develop this product for the people that would use it.

What I like and what I am interested to know might be completely different to other investors.