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Property Investment Strategies: Positive Cashflow Property
There are basically three types of property investment.
The first is negatively geared property, the second is neutrally geared property and the third is cash flow positive property. In very simply terms negatively geared property costs you money to hold, neutrally geared property breaks even and cash flow positive property makes you money.
So why doesn’t everyone invest in Cash Flow Positive property???
There are three Main Reasons:
It’s not right for everyone.
For some higher income earners a cash flow positive property is the exact opposite of what they are looking for, rather choosing a negatively geared property to offset their taxable income.
Don’t get us wrong, we are by no means against negatively geared property – in fact we actually create projects that will be intentionally negatively geared / but also show good growth, and this is the key to achieving an eventual return.
This has become very apparent in recent years. Many cash flow positive properties are in higher risk locations that have a single industry, such as mining. When commodity prices are high then the returns can be exceptional, over 15% in some cases. However when prices are down (as they are now) you can see rentals drop by over 50% or face long periods of no tenant at all.
OR IS IT? There are also cash flow positive properties in standard metro locations that have two or more sources of rental income and as such have a higher (and positive) return. These properties are in many cases less risky than a “conventional property” as if the market drops it only drops in line with the surrounding properties and you still may have a higher return than other investors in the same market.
BIG Property Investment specialises in these types of dual income properties.
They are hard to find or no longer exist.
As mentioned above, and as commodities prices are down, it has become much harder to find cash flow positive projects.
So the only option is to create them!
BIG Property Investments specialises in Dual Income projects that are not only cash flow positive but can also create a substantial development profit.
Contact us to speak with one of our training investment consultants to learn more. Become a Member and receive even more assistance.