Hi All,
Just would liek to know some thoughts on Building positive cash flow property.
As where i live Land prices are still pretty cheap and Ive done my numbers and rent is high enough to build a house and then rent it out for positive cash flow.what is every ones thoughts??
Matt
Matt
In periods of slow growth or stagnent property prices positive cash flow has to be the way to go.
Why buy something to actually loose money on it when you can make money each week from day 1.
Imagine you own a dozen of these you wouldn’t have to work for a living.
Richard Taylor
Residential & Commercial Finance Broker
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Hi Matt…..go for it, if you can buy and build and achieve positive cash flow from day one then it is a winner. Make sure you do all your homework though on building costs, like renovating they can blow out….keep in mind repayments will need to be made while the property is being constructed, under most circumstances you make periodic payments to your builder so your repayments will increase during construction. Does your expected rental income cover the time when you will receive no rental income?
Good luck
Cheers
Jeff Aquilina
Need a holiday? http://www.coralsearesort.com email [email protected]
If I stick to a budget and run my numbers right yes I have alot of home work to do but so far so good.
Cheers
Matt
Hi Matt,
When you crunch your numbers/budget, I would advise you to always add 10% for undisclosed costs. If you are then still achieving +ve cash flow then I hope everything goes awesome for you!
Good luck
krs
Sounds like its the first time you’re building, I’d say add another 15% from the fixed price. Make sure you crunch the numbers properly. I haven’t been able to find a buy land and build with +’ve cash flow anywhere in Oz. Perhaps I’m not teaming up with the right builders or buying the wrong pieces of dirt. I had achieve positive gearing (vs cash flow) results a couple of years back but with the soaring land and building costs, this has really thrown the margins and rent returns out. I find its a catch 22 really – regionals have cheap land but expensive build costs and in the city, cheaper build costs but exhorbitant land prices. And don’t forget land is cheap in the country for a reason – theres heaps of it. Don’t forget the old adage about land appreciating and building depreciating. Find the right balance and good luck!
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