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Investment Properties & Cashflow
Negative Geared Versus Positive Cashflow
Ultimately the ability to continually purchase properties will be based on the amount of debt you are able to service with your combined cash-flow from your
- salary,
- businesses and
- investments.
As property investors this is where ensuring your portfolio is balanced with positive cash-flow properties is beneficial.
After the so-called global financial crisis and the battering shares and managed funds received, many investors have been turning to property to create an investment property portfolio to not only keep pace with inflation, but also provide significant cash flows into retirement.
Property is considered a strong defensive strategy.
For example if the sharemarket is going through a period volatility, an investment in direct property can help smooth your returns as historically, property has returned attractive yields, with relatively low volatility.
Property is the choice of many investors due to its tangibility and its strong performance over time.
Negatively-geared investment property, places importance on the capital gain, where the capital gain will be significantly greater than the shortfall you need to contribute from your personal or household cash-flow to support the property.
Positive Cash Flow investment property means that after all expenses, entitlements and deductions your property doesn’t require any extra help to meet its expenses from your cash funds.
Over time, most properties will become cashflow positive as long as the principle debt is fixed or decreasing, and over the same time rents increase.
Accelerated Returns - The key to finding early accelerated returns with positive cashflow properties is research. This will be explained in detail in the conversations with your Property Investment Consultant.