All Topics / The Treasure Chest / Do you go for highest cash flow always?

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  • Profile photo of RoofarmerRoofarmer
    Member
    @roofarmer
    Join Date: 2003
    Post Count: 63

    Hi,

    If faced with the dilemma of going for a property in an up-and-coming (transition) area with $30/pw cash flow and another property in a more flat/declining area with $40/pw cash flow which property would you choose (all other variables being equal)?

    I would be more inclined to go with the $40/pw property as ‘a bird in the hand…’

    What are people’s thoughts and opinions?

    Jamie

    Profile photo of BelladonnaBelladonna
    Participant
    @belladonna
    Join Date: 2003
    Post Count: 12

    Depends on your strategy, if unlike me you have one! LOL [:D]

    If you’re after short term cash flow go the $40pw but be prepared that property prices may fall over the long term & you may not recover your cost if you have to sell up before prices rise again (if they do). If you’re more interested in long term capital growth of your property go the one in the area likely to experience more growth at the expense of immediate cash returns.

    It is possible to do both if you do your research right so I’m told… i.e. pick the cheap area about to boom & get good capital growth while getting high positive cash flow if your property is in a ‘high demand’ area people are willing to pay premium rent for.

    Profile photo of TheBTheB
    Member
    @theb
    Join Date: 2002
    Post Count: 135

    hi Jamie

    Welcome, welcome ! [:)]

    On the limited information given we will have to go with a generality, so think about this …
    Would you rather have you eat from your investment long term, or would you rather have it eat you ??

    Having said that, you need to really, really know that your research and decisions are based on facts and not opinions.

    i.e. fact – currently rented at $120 /wk
    opinion – prices may rise in this area

    cheers

    the Bruce

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