Is the dream of high-growth, cash-flow positive property now a reality?

Last weekend I inspected almost 20 properties in Sydney that ranged from $412,000 to just under a million to discover if the dream of high growth cash flow positive property had become a reality. 

They were all in the Eastern Suburbs (my usual stomping grounds) and they were all apartments. Rentals for my properties in the Eastern Suburbs had skyrocketed in the last 2 years (although things seem more subdued now). 

This may appear to be an unusual price range but I was determined to look in the sub-$500k bracket that seems to be quite hot at the moment (first home buyers using their stimulus-boosted grant) as well as a more traditional price bracket for the area that would buy you some quality – a couple of decent sized bedrooms, maybe a view and the scarce car park!

There were up to 57 (counted ‘em) people waiting for one apartment open for inspection (which certainly made me think I’d rather be selling into this market than buying) but I could see why they were waiting – a good one bedroom over the magic 50m2 mark in “original” but sound condition, priced at $439,000, and rented at $495 per week. At 100% finance that’s just $433 per week in interest costs (using the basic variable loan from the CBA advertised at 5.13%). Of course that excludes any tax benefits and depreciation but also includes any additional costs (strata fees, land tax and so on).  It made me wonder why the vendors were selling. 

While this was the best buy of the day others included one property that the agent was quoting “high $5’s” that was renting at $550 per week.  Assuming a sales price of $600,000 and using the same loan as above that means $591 per week in direct costs so a deficit of just $41 – tax benefits would probably take care of that. 

It seems pretty straight forward doesn’t it?  No wonder people are rushing back into the property market but are they rushing into hot water?  Are prices set to rise or fall? How will interest rates affect the market and will rental prices keep rising? 

There is a LOT more to consider and a lot of potential pitfalls and traps.

Discover your best strategy at my 6 hour “Crash Buster 09″ seminar on investing in today’s markets. It’s only $98 (but you can access our member rate of just $48) and is packed full of interesting information and strategies that are applicable right now including how you could buy property in today’s market that might just be cash flow positive.  

Plus you’ll learn about:

• the share strategy that has the potential to produce 2-4% net cash flow per month (and has already produced up to 6.6% net cash flow in one month for some clients);
• how to position your portfolio for maximum recovery power;
• which asset classes (property, shares, cash) you need right now to cash in on the recovery;
• how to identify and protect against the risks you’ll face (they’re there and there’s many of them – you need to know what to look out for);
• the best share and property strategies to use right now to profit;
• How to buy cash flow positive properties;
• the single, simple difference that could produce 3 TIMES the returns and significantly reduce market risk in hostile market conditions;
• finance strategies that can help free up cash flow and boost investing power;
• how to make the tough decisions about what to hold and what to get out of (if you don’t know this and you can’t take action, almost nothing will save you from going backwards);
• how to make superannuation pay including maximising your benefits and how to legally borrow to buy shares and property with super funds;
• how to pick stocks that are likely to outperform;
• a property buyers quick checklist;
• a property renovation quick checklist for maximum bang for minimum buck;
• how to make sense of what you see so you can feel confident and ready; and
• how to create a plan to participate in the recovery – it’s probably underway right now and you risk missing out.

Everything I’ve learnt in 20 years of investing – the good and the bad – has contributed to the content in these seminars.

Book now and access your special rate tickets by clicking here.

Cheers

Peter Spann