What is a Positive Cash Flow Property Investment?
Positive Geared Property seems to mean different things to different people, sometimes with very complex approaches (whole books!). At Plum Property we have developed two relatively simple definitions: • No Funds Required This is an investment where you never outlay any money, and for property investment this means that the income (rent) covers the repayments on a loan which is large enough to cover all the costs (including the full purchase price, mortgage transaction costs, inspections, conveyancing, stamp duty and agent fees). A loan like this could be as high as 110% of the value of the property, and that would be very hard to get. Also, there would need to be an extremely high rent return, and the old adage applies – where the investment returns are highest the risk is greatest. For example, a property which meets this definition of positive cash flow might produce a good rent return but have a low purchase price because it is a shack that is ready to fall down. Again it would be
