Positive Cashflow Properties are those properties which attract income greater than the expenses required to maintain them. In other words, the rent you obtain should cover your interest payments to the bank or lending institution, your council rates, insurance, maintenance and all other expenses associated with owning the property. Of course, if you pay a very sizable portion of the purchase price with your own cash, in one sense your property may be positive cashflow, but probably not when you consider the “opportunity cost” of what you could have obtained with that cash invested elsewhere. What is great is when you find a property which is positive cashflow when you borrow the whole amount, and pay the stamp duty as well.
Such properties are not so easy to find today. Typically, if you do find them, they are in an out-of-the-way place like a remote mining town, or they are old properties which may require a lot of expensive maintenance down the track. From time to time, a skilled property hunter might find a positive cashflow property.
What we have found is a great strategy for those who wish to enjoy positive cashflow using NEW properties and also KNOW what profit they are going to walk away with at the end of the fixed period.