WA Investors

Have to agree with Dazzling from his prior post(s) (Dazzling I know I’m sometimes mean to you for your tell-it-like-you-see-it approach, but in this case you have my full support [] ).

I agree with Dazzling that net yield can be a good indicator of cf status… by the time you get down to net income what’s left? The debt payment. As Dazzling says, you can compare the ratio (or %) on the net yield against the cost of debt (face or effective, your choice). Just a straight comparison if deposits aren’t making the principal amounts non-comparable.

I don’t think yield is a concept fraudulently borrowed from commercial investing. With both types of property you can take effective gross rent and whittle it down to NOI; apart from who pays for the variable outgoings it’s much the same process.

Maybe Brahms is referring to the loosely-worded “cashflow positive” scenario in which a negatively geared property gets a serious cashflow boost from pro-rating fat depreciation benefits – in that case the +ve or -ve cf status of the property would depend to a degree on the purchaser’s financials.

Tell me if I’m wrong but I thought Steve’s whole point in his books etc is that for a property to count as a genuine contributor to the investor’s cashflow position it needs to meet and exceed its expenses from its rental income.

Bob

Simon_G,

While I don’t know what Dazzling’s investing in, I can say it’s usually not Residential, so if that’s what you’re looking at then you won’t find the returns he’s quoting.

PK