How to Find Positive Cashflow Real Estate
A lot of people tell me that it is impossible, or near impossible, to find positive cashflow real estate. People want to know how to find positive cashflow real estate and that is what I am going to be teaching you in this article.
Almost anyone can find an investment that is going to lose them money. In Australia people think that they are incredibly smart buying real estate that they can lose money on. They think it is smart because for every dollar they lose the government gives them a tax break. So for every dollar they lose the government gives them 30-50 cents.
I don’t know about you but to me this sounds like a dumb deal. If I told you that you could give me $1 and I would give you 50 cents back you would laugh at me. But people are doing this with real estate and thinking it is smart.
It is a lot harder to find investments that are going to earn you money every month. In order to find these investments you need to know where to look. Positive cashflow real estate is not out there staring you in the face. Real estate agents don’t generally advertise property on the internet saying “Positive Cashflow Property”. Because it is harder to find a lot of people will tell you that they don’t exist. I know for a fact that this is not true and I am going to share with you some helpful tips on how to find positive cashflow real estate.
Look In Rural Towns:
One of the worst places to look for positive cashflow real estate is in expensive areas of capital cities. In these expensive areas it is often much cheaper to rent than it is to buy, and this means positive cashflow properties are next to none. For example, in Sydney, Australia properties on the coastline generally have some of the worst rental returns in the country.
However, if you start looking in smaller areas such as rural town centers and rural towns you are more likely to get a great rental return for your investment. This does not work for every rural town or town centre but you are certainly more likely to find your positively geared properties in these areas.
Look For Apartment Blocks/Complexes:
Houses are great investments, because people will always want to buy houses, but often it is difficult to find a house that can give you a positive cashflow. You can increase your chances of finding a positive geared property by looking at blocks of apartments instead of houses.
Blocks of apartments are often bought by investors for their rental income and therefore can create more cashflow than a house would. Again this is not always the case and you should always do your research before investing.
Sometimes Positive Cashflow Property Needs to Be Created:
Sometimes you cannot find the perfect investment and you need to create the perfect investment. There are many ways you can take a negatively geared property and make it positive. Some examples are increasing rents by providing better accommodation (doing some renovations, including washers and dryers in every apartment etc.), you could get an interest only loan so you are paying less on your loan repayments, giving you more cashflow. You could buy land and build an apartment complex or hotel. You could use a corporation to invest and use certain tax strategies to decrease your expenses and therefore increase your income. You could buy land, subdivide it and sell off some of it, meaning you have less debt and more cashflow.
There are many ways to find or create positive cashflow real estate, you just need to know how to do it.