Positive Cash Flow Properties and Investment

A positive cash flow property is one which enjoys a net gain based on the rental income being greater than costs associated with owning the property. These costs may include the expenses associated with purchase, legal/ management fees, rates, electricity and upkeep of the property. A positive cash flow property is often what many investors aspire towards, with their investment property actually generating a profit rather than recording a loss. The current conditions are creating a market where positive cash flow properties are now becoming more common. Property values have fallen in many regions while at the same time some areas are showing increased rental rates and interest rates are falling. The combined effect is that rental yields are trending upwards.

With confidence low, inflation high, some value declines having been recorded, more and more investors will be looking to purchase positive cash flow properties in order to reap the benefits of a return from their property and to also capitalize on future property value growth. With vacancy rates dropping, positive rental growth and value growth being minimal, it is anticipated that more and more properties will be moving into positive cash flow property. The most important thing to know when seeking a positive cash flow  property is how much income is required to offset the expenses associated with owning the property – this will vary from buyer to buyer depending on their own financial situation. It is also important to ensure you research the rental market and get a firm understanding of what the expenses associated with the property will be and pay the best price possible for the property. The benefits of a positive cash flow property in your strategy are clear. The property pays the investor for having it in their portfolio. Positive cash flow property increases your serviceability therefore it makes you more attractive to banks and lenders; increasing your income and giving you the ability to borrow more. For investors looking to balance their portfolio, the extra income from Positive Cash flow properties can be used to cover the shortfall associated with the costs of holding high capital growth properties.

Buying investment property can be extremely profitable, when done correctly. However, most investors never make a significant income due to faulty technique. If you are looking to make money in real estate, here are some tips that work.  Buying investment property and holding is a much smarter strategy than merely flipping. This is because the income is much more long term, and it is passive. Buying investment property and holding allows you to keep earning from a property for years to come. When you are buying an investment property you should inspect it thoroughly. This will ensure that there is nothing major that needs to be fixed on the home, or else you are going to have an expensive repair. Do not be overeager. Sometimes while buying investment property, beginning investors are anxious to get their feet wet, and so they just buy the first property they look at against their better judgment. Do not make this mistake. Instead, you want to take your time and shop around until you find something that looks good.

Positive Cash Flow Property | Buying Investment property | national rental affordability scheme