Hello,
If a property is to be +CF i need to also think about rates, water, costs, rental fees. So if interest is 7% min, i need to be investing in something that returns around 10% to cover these extras.
On $100k does 10% sound resonable?
Apart from houses and appartments, has anyone found success in other forms of property? eg. shops, commercial sheds, ect.?[biggrin]Originally posted by vyaw2003:Hello,
If a property is to be +CF i need to also think about rates, water, costs, rental fees. So if interest is 7% min, i need to be investing in something that returns around 10% to cover these extras.
On $100k does 10% sound resonable?
Apart from houses and appartments, has anyone found success in other forms of property? eg. shops, commercial sheds, ect.?[biggrin]Hi vyaw2003,
sorry to reply so long after your post, but I just found yours.
Positive cashFLOW means that your property is positive after tax returns are considered. It may be negatively cashflowed initially, but becomes positively cashflowed after you receive tour tax return.
Positive GEARING refers to the total rent being more than the total expenses. In this case you would have to pay tax on the profit.
A positively geared property is very hard to find right now.
A positively cashflowed property is easier to find, and almost always involves a property built after 1987 so you can claim building depreciation. The use of a quantity surveyor is also required here. They compile a ‘depreciation schedule’ which you then give to your accountant and he/she applies the depreciation to your taxable income. This can be significant and turn a negatively geared property into a positively cashflowed one.Cheers,
Marc.
[email protected]Hopefully this is not old ground and is of some assistance to the newer people.
A positively cashflowed property is easier to find, and almost always involves a property built after 1987 so you can claim building depreciation. The use of a quantity surveyor is also required here.In NZ building depreciation is available regardless of the age of the building and starts new upon each purchase ie – the purchase price minus the land value is the new start number for building depreciation.
cheers
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