Home » community » News » Positive Cashflow Properties

Positive Cashflow Properties

If you have a mortgage on your home, did you know that with certain investment property strategies, you can “Borrow yourself out of debt”? It’s true. We hear so much about Negative Gearing and Positive Gearing. Negative Gearing strategies come with negative cashflows and tax deductions on these losses. Building a property portfolio using negative gearing is usually difficult because of the diminishing effect on your disposable income. Positive gearing strategies usually use a lot of capital to fund property purchases to reduce the debt on investments thus improving cashflows. There is also usually an increase in taxes on these types of investments because you’re making an income. When you use a lot of capital it then also makes it difficult to build a property portfolio.

Investing in property like this is easy. It’s so easy to find a negative geared property, they’re everywhere. They are in the suburb you live in. They are around the corner. Real Estate agents sell them all the time. Agents aren’t assessing the investment performance potential of these properties for you. They are working for the seller and trying to get the highest price for their client. It’s also very easy to turn these negatively geared properties into positive geared investments by just putting more cash into the deal and borrowing less.

Imagine you can purchase an Investment Property that gives you tax deductions and at the same time it gives you a positive or close to neutral cashflow with over 100% borrowings. This strategy exists for the astute investor. It’s called Negative Gearing with a positive cashflow. Finding a product like this requires a lot of research, planning, analysis and profiling against your individual financial position. Depending on what your tax position is you can find specific properties that perform in such a way that they offer you a tax benefit and a near positive cashflow. It is so simple to build a property portfolio when each asset literally costs you next to nothing to hold. The key features of these types of products is that they are in areas that have a strong demand for rentals. The cashflow is higher than normal due to this demand.

Having an investment portfolio with positive cashflow and tax refunds gives you an opportunity to redirect this cash and retire your home debt so much faster. Not all loans are the same. Building the right borrowing structure that allows you use this investment cashflow to retire debt is a key element to becoming debt free sooner. Imagine finding the right investment property together with the right lending product that eliminates your debt on your home and the investment property sooner than you can pay off your current home mortgage today. That’s what I mean by “Borrowing yourself out of debt”.

To understand how Negative Gearing with a positive cashflow can work for you is as simple as catching up with an Investment Property Consultant who understands the strategy and show you to build such a portfolio using your current situation.

Let us help you. If you would like a recommendation, please click here. Happy investing!

Article By
Joseph Chamoun

written by:

McKinley Plowman