Property Investment Blog

New call-to-action
All Posts

[Infographic] 5 Easy Ways to Find Positive Cashflow Property


The positive cash flow property investment strategy involves purchasing property that will create surplus cashflow pre-tax. 

This blog is aimed at property investors of all levels of experience, and covers:

  • Some goals you can aim to achieve if you are looking to find and purchase positive cashflow property.
  • A process to follow to help you find, analyse and research positive cashflow opportunities
  • How-to videos which demonstrate how we can help you find high yielding property.


Strategies for finding positive cashflow properties

There are many strategies that you can follow to target positive cashflow properties when starting your search and also to manage these properties to help boost cashflow.

They include:

  • Looking in high yielding suburbs.
  • Buying properties 20 - 40% below the median price for the suburb.
  • Targeting multiple income properties - e.g. properties with a granny flat.
  • Buying in regional areas or targeting student accommodation.
  • Renovating and adding value to increase rents.
  • Managing interest rates and fixing when we think the current interest rate is at the bottom of its cycle.

 Key goals when buying property for cashflow

  1. To find and purchase a property that produces surplus cash flow (pre-tax). So we are not talking about depreciation or tax at this stage, the property needs to produce cash upfront.
  2. To understand key suburb fundamentals and property facts that will help us make a good buying decision. 
  3. Accurately analyse the long term cashflow and set a maximum purchase price whether we are buying by auction or negotiation.

Positive_Cashflow_Buying_Process

Rental yield is a measure of how much cash an investment property produces each year as a percentage of the property's value.

Rental yield can be calculated as a

  • gross percentage i.e. before expenses are deducted, or
  • net percentage i.e. with costs accounted for.

The gross rental yield is a simple calculation to use, it doesn't take into account the expenses of the property.

Formula for gross rental yield

(Weekly rent x 52) / Property purchase price x 100

A property may have a high gross yield for example, but also have high expenses, making the net yield low when these are taken into consideration.

To work out the net rental yield, you will need to know the total expenses of the property. You can then use this formula.

Formula for net rental yield

(Annual income - Annual expenses) / (Total property costs) x 100

Definition of Positive Cash Flow Properties

New Call-to-action

James Lawrence
James Lawrence
James is the Marketing Manager at Real Estate Investar and has been with the company for over 10 years.

Related Posts

Cash Rate On Hold at 0.10%

Statement by Philip Lowe, Governor: Monetary Policy Decision  

Red Flags to Look Out For in a Potential Property

When buying a home or an investment property, it can be very easy to get caught up on everything you love about a home or unit and forget to look at some of the potential issues. In many cases, some of the major problems are not always obvious, and it’s important to get an idea of what you need to look out for before you begin searching.

Pros and Cons of Investing in Holiday Homes

Investing in holiday homes can be a successful property investment strategy and have the dual benefit of providing you a lifestyle investment too if you use the property yourself. So here is a list of the pros and cons that you need to consider before you take the plunge and pursue this strategy.