Remember - you can also have a Negative Geared Property giving
you a positive Cash Flow.

For Example:

Lets say you have an Investment Property worth $250,000 at 7.5% Interest Rate
                          = $18,750 per year
Rental Return 6% = $15,000 per year
                          _______________
                            -$3,750 short fall

But, due to expenses, depreciation of the building and internal fittings and fixtures that I can be claimed against income tax, I can reduce my personal tax by (for this example), $4,000 for the first year.

                                   - $3,750 short fall
                                     $4,000 tax return
                                    ______________
                                     $ +250 positive cash flow

I'm making a whopping $4.80 per week! Not much, is it?
So you must first know what it is that you want in your Portfolio.

Have you ever thought to yourself- Why do Investors use Positive Cash Flow?

More than likely it is due to low capital growth and the rent increasing faster than the property value itself.

I'll give you an example.

Let's use the property mentioned above but use Positive Gearing.
I'm now going to put that property in a high capital growth area.

In the same year the investment property value increases from $250,000 to an amazing $320,000. You can't go to the tenant and say, My property is now worth more money, pay me more rent!

That doesn't work!

If you tried it you'd probably be without a tenant!

With investment properties, you must always remember cash flow.
Don't fall into the trap of asking for higher rent and having no-one wanting to rent your investment property!

Let's continue.

The property is now worth $320,000

$320,000 at 7.5% Interest Rate =$24,000 per year
Rental Return 4.7% =$15,040 per year
Tax return claim =$ 4,000 first year
_______________
-$4,960 my short fall for this year.

So now this property will now cost you approx $95 per week

Remember - negative geared properties will give you much more money in equity which you can use for your retirement or to purchase more investments.

I personally have all negative geared properties in high capital growth areas. These properties are starting to be neutrally geared due to rent going up over the years and offcourse with inflation.

What I will also say is, that it all depends on your Comfort ability, lifestyle and living expenses and your Cashflow.

If you have the chance to sit with me in a personal meeting then you'll understand where I'm coming from. We will cover comfort-ability, lifestyle and living expenses and together we will work on what will best suit your personal cash flow. I believe this is to be the most important part of Property Investment.

You see how property investment works, but is it for you?

You must answer these questions;
Does your Cashflow allow you to invest?
Does it work in with your goals in life?
What are you doing now for building Wealth?
What have you changed financially to start moving ahead with your future?

If you think you are in a position to move ahead, then register yourself in for my next interstate trip and I will call you to make an appointment to see you when I'm in your area.
Click here to register yourself
 

Click Here & Get Your FREE
Weekly Investment Property Tips.