Are you thinking about buying a positively geared property?
In this video Ryan talks about the benefits of investing in positive cashflow property including:
- Making money from day one
- Delivering a return on investment in up, down and sideway markets
This is a guest video by Ryan McLean, director at onproperty.com.au.
Ryan launched On Property in 2010 to support property investors interested in positive cashflow property.
We would love to hear your feedback on Ryan’s video in the comments below.
We would also love to hear your thoughts on buying positive cash flow as opposed to negative cash flow properties?
Take it away Ryan!
Transcription of the video:
Why Positive Cash Flow Property?
Hi everyone from Pumped On Property! I am pumped to be here today doing this guest video for Ben and for his audience. I really appreciate the opportunity. Hi my name is Ryan I am from onproperty.com.au and today I am going to talk about why I like positive cash flow property.
I love positive cash flow property. What really got me into the property market and what really got me interested in investing in property was Steve McKnight’s book 0 to 130 properties in 3.5 years. I’m sure a lot of you have heard about, if you haven’t read it already.
An Exciting Way To Invest
Positive cash flow property is a really exciting way to invest. Obviously most properties in Australia are negative geared and so they are harder to find.
But there are some really great things with positive cash flow property that you are not going to find with other types of properties so I wanted to talk about that.
You Can Make Money From Day One
One of my favorite things about it is that you can make money from day one. If you are purchasing a negatively geared property you are effectively losing money every single month because the regular income coming in isn’t paying for your expenses.
You then you need to pay some money into that property to keep it going. The goal is that the property goes up in value and you make more than what you spend on that property back.
Negative gearing can be a great investment strategy. There’s a lot of people that have become very rich through negative gearing and investing in negatively geared properties. But with negative gearing you don’t make a return on your investment from day one.
You need to often wait years until the property goes up in value to either borrow against the equity in the property or to sell the property to access that cash. That’s one of the things I love about positive cash flow property is that you can make money from day one.
Continues To Deliver In Flat or Declining Markets
Another reason why I love positive cash flow property is because positive cash flow property can actually continue to deliver you a return on investment in down markets when property in decreasing in value and sideway markets when property is not really doing anything.
The reason for this is with positive cash flow properties there is more income coming in than expenses you have to pay and that’s your return on investment. So even if the market is going down you can still be making money as long as you’ve got rental income coming in and rents aren’t plummeting as well.
By having that rental income coming in you can continue to wait, you can continue to make money even when the markets are not doing as well as you’d like and it’s not costing you to wait because are making that money.
You Can Get Capital Growth As Well!
Another reason why positive cash flow property is because you can still get capital growth with positive cash flow property.
A lot of people say either invests for capital gains or invest for positive cash flow. And a lot of positive cash flow properties are in regional areas not in the heart of Sydney or something like that so it can be harder to find properties that are going to grow as well.
By doing your research first and by buying the right positive cash flow property you can actually get capital growth as well.
So there are 3 reasons. There’s a whole bunch more but I am going to leave it at that today.
As I always signed off on my videos until tomorrow remember that your long-term success is only achieved one day at a time.