How to Find a Positive Cash Flow Property

A Positive Cash Flow Property is defined as a property that makes more money than it costs to hold. On the flip side is a Negative cash flow property, which is where the holding costs out weigh the rental income.

At PropertyTutors we are often asked what is the best way to find a Positive Cash flow Property? The following are tips on how to spot them and make your Property Investment NZ business a success.

Tips for finding Positive Cash Flow Properties

  • Crunch the numbers – you need to define what sort of return you need to make a property positive cash-flow. This will depend on your income, your tax position, and your level of comfort with debt.
  • Debt funded Positive Cash Flow options – If debt is something you are able to cope with, and can manage well, you may consider using equity to fund the short-fall.
  • Statistics – New Zealand Property Investor or NZPI Magazine often have Statistics showing Average rental returns for many areas. This can give you a starting point to work from.
  • Surf The Net – You have the ability to search and research whenever suits you, so any opportunity you get you should check online sites. Use alerts to get new listings within your search criteria delivered to your inbox instantly.
  • Get to know your Real Estate People – Always keep up to speed with your agents – they will let you know about properties before they come on the market and are valuable source of local knowledge.
  • Network – Other Investors often find out about changing areas, keeping up the gossip and news could benefit you.
  • Make ‘Ridiculous’ offers – If you find a property that has a higher than usual return but still doesn’t fit your specific price expectation then calculate what price you could pay to have it work for you and make an offer. It may seem like a ‘ridiculous’ but nothing ventured nothing gained.
  • Unusual properties – Consider unusual properties where you can potentially get a better than average yield for example: Old state houses or other properties that can be renovated and turned into 2 or more separate living areas. Consider Granny flats as a potential for double tenancies and always consider buildings that have been something else, like school houses or churches – be creative.

For further reading on Property Investment NZ, click on the articles below:

Setting Goals for Financial Independence – click here

Tips for Becoming a Property Expert – click here

Buying Rules for Property Investment – click here

5 Tips to Add Value through Renovation – click here

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