I am looking at buying my first property and reading McKnights stuff he recommends only positive cash flow. However checking out some of the free seminars, they have said that they recommend that the 1st property should be aimed at capital gains, I am not sure why.
What are peoples opinions on this? Should i aim for only positive cashflow?
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Hi Eyesclosed.
My opinion is, it really depends on your situation.
Even though I agree with Steve’s philosophy, it’s becoming harder and harder to find properties meeting the 11 second rule but they are still out there.
I believe in a balance of both.
If your young enough and have a good secure salary, why not go for negative geared to start off with then go positive cash flow for your 2nd or 3rd property.
For every negative geared property, you should look at getting 2/3 positive cash flow properties to balance it out.
You’ll then gain the benefits of capital growth (provided you purchased in a good area/location) from the negative geared property and good returns from the postive cash flow property.
Regards,
Mk2r[smiling]
Negative gearing is not for me, I can’t afford the shortfalls, it can work for other people, it depends on your own goals!
What I don’t understand, is why only the first one?????
What was their reasoning for this?We buy properties in all conditions. Can offer Immediate Cash Settlements, No Real Estate Agents Required
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phone 0412 437 582I’m with Dr X. Yes it may be harder to find a positive geared property but so is the extra $$$$ you are short each month with a negative geared property. What do you do when it is vacant for a period of time?
Dr X
Maybe the first property aimed at capital gains so you can keep investing. I’m with you though, positive or at least netural gear.
How many negative gear IP’s can you have?
Then compare with positive?CATA
Asset Protection Specialist
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