Positive Cashflow - What Is It?

12-01-24 06:45 PM Comment(s) By Suze

What is a positive cashflow investment property and is it worth seeking out? Simply put, a positive cashflow investment property means that the income received from the investment from rent outweighs all expenses associated with the ongoing cost of the property. So, the rent received from the property is more than all costs, such as agency fees, strata, or body corporate if it’s an apartment, council, and utilities if it’s a house, mortgage repayments, and repairs or maintenance of the property.

Does that mean that these are good investments?
Not necessarily. A good investment is one that will have strong capital growth in the first 3-5 years and attracts quality tenants right from the beginning.

If a property does well in the first 3-5 years, the investor doesn’t need to be too concerned about changes to capital growth, price, or rental income fluctuations after that initial boon. 


The reason is that, if you get it right, a third of your investment profits of a 20-year investment horizon, will be made in the first 5 years. 


This means you can ride the capital growth wave forevermore, knowing that you will never experience price, growth, or income below your initial investment.

So, it is critical that the criteria for assessing a good property investment aren’t lost just because a purchase might be cashflow positive. The key assessment criteria, the macro and micro drivers of growth are as important as they’ve always been.


If you want to ‘get it right’ from the beginning, call the experts in property – Calla Property

 

 Susan and her team will take the time required to explain how you make money through property investment, the best suburbs to invest in, and the best properties.

Contact us today so we can start Building Your Dreams.

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Calla Property Investment Specialists:
+61 407 465 850 | +61 482 080 189
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