Hi guys
I just finish reading through 0-130 properties in 3.5 yrs and decided to join the forum.
I have been looking at properties for the last 4 years and in that time I’ve managed to purchase 1 house and 1 apartment. I broke rule 1 in any investors terms by selling the free standing home. It made a generous profit and no CGT as it was our primary residence.
Anyway, I’m in Perth and I’m seriously struggling to find any property (be it in the metro or regional area) that would qualify as positive cash flow. There have been a few which was +ve to a total of $4 a week, making a staggering $208 a year. This could all change with increase interest rates, etc.
Anyhow, I’m confused to how everyone managed to find their “cash cow”. Do you go for a fairly low cost property such as a unit costing say $60,000 with returns of say $60/week and despite a -ve gearing at the start, it should eventually generate +ve cash flow (after paying off majority of the loan). I’m not sure if this is the right way about it tho.
Sorry about the long post
JV
Hi JV,
We are currently at a point in the market where rental returns are very low. This combined with the interest rate rises of late 2003 means the likelihood of you finding something that qualifies as positive cashflow as per Steve’s 11 sec rule in Perth is very remote.
As such some people are venturing out into the ‘sticks’ for these properties.
In my opinion something in the metro area with good growth prospects is a better bet. With depreciation, interest only loans and an effective broker the cashflow situation can be reasonably managed.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
