Ok, i admit it, despite surfing the net for hours and hours i cant seem to find a property that is genuinely positively geared. I can find places that will have a positive cash flow after tax deductions (depreciation) but not genuine cash positive places before deductions.
Will anyone out there help me find one town or area where this is possible?
Please help me to get started. Just give me one area or place to look. (If you are feeling generous you can give me more than one [
] ).Really, i need your help. Just give me a town or two to chuck in my search engine.
Below is an example of a property that would be cashflow positive. At a guess the rent would be around $100/week. This was found using the http://www.realestate.com.au search engine and limiting myself on price across a state. I went to other states as well and found similar properties.
Now I will admit that they are not 4 b/room brick and tile jobs within 15kms of the city (large metro areas) but they are there. try putting in a broad search limited only by price (cheapest first) and see what comes up. Most are in Country areas but it is surprising what you will find. I have bought 2 properties in the last three months that are cash positive in a place wherer there is well over 100,000 population.
Whatever you do BKW do not give up. I went through exactly the same thing when I started and Steve did not give me any answers then (direct places) as I will not now. Believe me they are still there you just have to look harder or become more creative. Remember
any property can be positive when it is wrapped. Just depends what you are after out of your investments.Hope this helps.
GREAT RENTAL
$39,0002 Bedrooms plus sleepout, new roof, lockable under, Handy to schools and shops.
Enjoy
AD [:0)]
(Andrew)“”Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world.”
Albert EinsteinHi BKW
Have to second what AD… Just looked on the same website AD mentioned and in less than 30 minutes found over 50 properties that would easily be positive cashflow.
It’s not just about searching on the net. You probably also need to pick up the phone, start speaking to agents etc… and also think outside the square… ie don’t necessarily look in the areas that you live.
An example I can give you is
3 bed room weatherboard home… In need of minor TLC; ie coat of paint… near schools $34,990 Country town location
Will rent for $90 pw based on my reasearch
Also need to think creatively, there are many ways to turn a property into a cashflower and there are plenty of resources available that will assist you with this
Don’t stop looking..It’s all out there waiting for you
Regards
David
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.
True, you need to factor in vacancies, or find a creative way around them! [
] For example if you look up the area and see that there’s an 8% vacancy rate, I’d assume that your place is going to be vacant 10% of the time when crunching your numbers.One alternative to just assuming the worst on rental vacancy is to line a tennant up *before* purchase through something such as an “agreement on sale”. This way you can negotiate a property with a 30 day escape clause with the right in that time to show the property to prospective “occupants” (as this could mean either a tennant or purchaser). If you find someone who likes it, you get them to sign a agreement on sale document that states if you buy the property then they will rent / wrap purchase it. This way when you buy it, you have a contracted tennant already arranged. If there is no interest in the property from tennants whatsoever, you can invoke the escape clause.
This does require more negotiation skills as obviously not every vendor will be thrilled with the idea of a 30 day escape clause, however if by having the security of this clause, you can offer them a higher price, knowing that your profit is assured (and that you don’t need to factor in above average vacancy rates) then the vendor and you may just have found a win win solution.
As in any problem solving the question is what really is the problem? Are they more interested in a higher price (:. use the 30 day method) or a faster settlement (:. they’ll need to be more flexible on price).
Anyone have any other ideas on protecting your profit upfront?
Quasimodo
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Funny how action has a way of answering all of our fearful questions…
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I just wanted to add that when people dont anwser this type of question with a location for you, they arent trying to keep all the good stuff to themselves. It is truely to help you find them for yourself.
I was an instant expert after I found my first one, well for about a minute. And I was really proud that I did without help. I am also not talking about buying the first one, just finding it which was also on realestate.com
My hint is to pick your state, then pick a price range (start low) and see what comes up. Also learn about the 11 second rule!
jg1234,
You need to do your due diligence on the area as well as the property to ensure that you are confident the deal is good. This includes assessing the risk of rental vacany. And yes there are other strategies to consider.
Cheers & Good luck
Leigh K“If you will take on your self-doubt and laziness, you will find the door to your freedom.”
-Robert KiyosakiBy the way, also use the search engine on this forum to find possible locations, I do remember finding a discussion that was compiled listing areas people thought were going really well. It was about Victoria regions though.
LK
“If you will take on your self-doubt and laziness, you will find the door to your freedom.”
-Robert KiyosakiIf you are after genuine positive cash flow real estate then you might like to consider investing in the UK.
I have purchased 10 properties with rental yields around 20%. The best part about them is that vacancy is rarely an issue since they are in major cities.
I’m not talking about London here, but deals can be done in the likes of Leeds, Manchester, Sheffield and I think even Edinburgh.
Investing in the UK isn’t much different to investing locally. The only real downside is that you can’t use Australian property as security. If you intend on using property as security you are better off arranging a line of credit and sending the money over that way. The rest can be borrowed from a UK bank.
Incidentally, the properties I purchase in the UK are around AU$65,000.
Anthony
[email protected]
] ).
] For example if you look up the area and see that there’s an 8% vacancy rate, I’d assume that your place is going to be vacant 10% of the time when crunching your numbers.
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