Positive Cash flow is where the rent received on an investment property exceeds all the expenses associated with the property. You actually make money from day 1.
In the past the only way you could achieve this was to purchase in a mining town where it was possible to achieve exceptionally high rents. This is a very risky strategy. For example in Moranbah, a QLD coal town west of Mackay were receiving upwards of $2000 per week a couple of years ago. After a couple of mines closed rents dropped to around $300 pw. Ouch!
The game changer occurred three years ago in NSW where the government made it legal to rent granny flats under its Affordable Housing Policy. Don’t get me wrong …people did rent out granny flats before that but technically it was illegal. If you had a row with your tenants they could report you to the council and you were in trouble because granny flats were only intended for your close relatives. With the change in policy, investors were no longer bound by these restraints and could rent the granny flat or secondary dwelling to all comers.
A few builders saw the potential of this immediately and began to build primary and secondary dwellings together…they actually look like duplexes and are very attractive. Bottom line is this: you buy ONE block of land but you get TWO lots of rent! It’s ALWAYS going to be strongly positive cash flow.
Click here to see our currently available Positive Cashflow Investment Property.