Is positive cash flow the right strategy for you?

What is a positive cash flow property?

Unlike a negative cash flow property, a positive cash flow property is an investment that earns more than it costs to own. For example, if your rental apartment brings in $36,000 a year in income with yearly expenses, maintenance costs, and principal and interest payments of $12,000, your positive cash flow would be $24,000 a year.

A positive cash flow property earns more than it costs to own.

Positive cash flow on a property typically occurs when rents are high and interest rates are low, or after you’ve owned a property long enough that you’ve made a significant dent in your principal.

Positive cash flow on a property typically occurs when rents are high and interest rates are low.

One strategy many investors use is to buy a positive cash flow property to help offset the losses from a negative cash flow property. However, bear in mind that you must pay taxes on any profits you make, although these can be minimised by the property’s eligible deductions and potentially any loss on the negative cash flow property.

When could positive cash flow be right for you?

When deciding if a positive cash flow property is right for you, it’s important to look at your investment objectives as well as the availability of properties in your desired areas. Sometimes positive cash flow properties are hard to find, and may be located in areas of high rental demand but lower growth than negative cash flow properties – for example, housing developments near specialised industries such as mining.

Pros

• Positive cash flow properties can offer lower prices, stamp duty and taxes.
• Positive cash flow can be used to pay down your principal, for renovations or for investment in other properties.
• Positive cash flow from your property can supplement your income and help build up your portfolio faster.

Positive cash flow can help build up your portfolio.

Cons

• You must pay taxes on any profit generated.
• May be more volatile due to being located in less economically stable areas.
• Positive cash flow properties may be perceived as having less capital gains potential.

As with any investment, there are pros and cons associated with a positive cash flow property. While earning a profit from day one is a key benefit, positive cash flow properties may not have the same growth potential as negative cash flow properties.

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE