We currently own a 30 yr old 4×1 rental property while renting ourselves. We get $190/wk income from the property & owe $115,000 on a P&I loan. At present, the property is almost positive cash flow but we miss by a few thousand per year. Does anyone have any suggestions as to how we might make this positive?
There are a few possibilities that you could consider.
1) Convert your loan to I/O. This will save some of the outgoings.
2) Check you current rent to ensure it is at market rate. Some PMs and/or owners lose touch with what the rest of the market is doing and this could be costing you money.
3) Is it possible to add value to the property while at the same time increasing the rent even further. For example some tenants are happy to pay rent + for items such as airconditioning and security. new carpets maybe, the list is endless and your individual circumstance will determine what can and can’t be done.
4) You haven’t indicated the age of the property but it may be possible to depreciate all/or parts of the property.
5) Have you considered the advantages of a ITWV that can assist with your pay period cashflow?
Ultimately the cashflow issue needs to considered in light of your personal finances. You also need to consider why you have the investment property – cashflow is but one part of the equation.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958a quick calc. tells me that if you convert you loan to i/o you will gross around $40 p/w. obviously this doesnt take into consideration maintenance costs, insurance etc. i think given the other costs, you still should be in positive territory. eric
Hi Elitess
Do you want to hold onto the property long term? If not necessarily, and the great suggestions listed above don’t help, then maybe a lease option or wrap might be a thought.
Good luck,
Scotty3
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