Investing in positive cash flow property can be a great investment strategy, but often it can be difficult to find the diamonds in the rough. In this short article I am going to hear you how to get positive cash flow suburbs, so you can squeeze your search and increase your chances of finding a positive cash flow property.
1.
Get Out Of The City
Positive cash flow properties can be extremely hard to get in big cities and especially in the near suburbs in those cities.
If you get out of the city, often entirely by a few hours drive, and go looking in rural town centres.
You don`t get to look in tiny towns to get good rental returns, often towns with approximately 10,000 or more people will have good rental returns but will also have enough rental demand that your property shouldn`t be vacant for months at a time. Don`t be afraid of country towns, just because they don`t have millions of people in them doesn`t mean they can`t be a good investment. Always do your research and see the town that is best for you.
2. Get In To The Life Of The City
Often inner city suburbs can provide a surprising rental return. Studio apartments and one bedroom apartments are more popular in the national city rental market than in the suburbs and you can sometimes get a good rental return for these properties.
If your inner city unit/house comes with a garage/car spot then you could see your rental income increase dramatically by renting out the property separate to the car space and receive rental income for both.
Just as you shouldn`t be afraid of the country, you also shouldn`t be afraid of the inner city. It can extend great rental returns and, if you buy in a safe area, can provide you the security of a large population and large rental and purchasing demand which should hopefully fuel growth.
3. Look For Dual Occupancies
Dual occupancies are where you can get out on holding to two different people. This may be a 4 bedroom house that you can go in half, add a kitchen and have 2 x 2bedroom rental properties. Often 2 tons of 2 bedders will give you a higher rental return than one 4 bedder and in many areas the motivation for two bedroom properties is much higher so there could be less chance of vacancy.
You could also have a site that has a granny flat attached to it. Often granny flats don`t add a lot of regard to a house, but they can bring in extra takeal income if you tear them out separately.
Dual occupancy properties aren`t that common so you will need to see hard to see them, and if you need to turn a single residence into a dual occupancy residence then make sure you abide by appropriate government regulations, but this can be an effective way of achieving a positive cash flow in areas that would normally get a negative cash flow.
4. Look For Opportunities To Get A Home Into A Cash Flow Property
Look for opportunities to get a dud into a diamond.Don`t lose a range because it appears to be negatively geared in the beginning. Maybe you can get some adjustments to operate it from a negative geared property into a positive cash flow property.
You may be able to do some minor renovations and make the rent, maybe you can produce a new layout for the home or do larger scale renovations. You might be able to carry out the garage or granny flat separately. There are a lot of things you can do to form a negatively geared property into a positive cash flow property you just need to take by the box a little bit.
5. Look For Rental Growth Areas
Rents go up and rents go down, but the overall trend is that rents go up over time. It is important to look for rental growth areas, where you believe rent will go up over time.
If your rental income increases then it can rapidly turn a negative or neutral cash flow property into a positive cash flow property. So even if you get with a negative cash flow, if rental growth is strong so you could see yourself with a nice cash flow in a year or two.
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