[THE VAULT] THIS PROPERTY EARNED ENOUGH TO FUND TWO MORE PURCHASES
In just three years, this property has gone from neutral to positive cash flow and raised enough equity to purchase another two investments for our client.
CAPITAL VALUE HAS ALMOST DOUBLED SINCE TIME OF PURCHASE
We found this property for our client during the first half of 2014. Located in the outer suburbs of Sydney, it was purchased for just $225,000.
It is now valued at between $400,000 and $430,000, having made over $200,000 in just two years.
RENT HAS RISEN SHARPLY OVER TIME OF HOLDING
Rent was being charged at $250 per week when this place was first bought. Since then, rent has increased by $100 a week to $350 a week.
What started as slightly negative to neutral cash flow has turned positive by around $100 per week in the space of just three years.
INVESTOR USED EQUITY TO PURCHASE TWO MORE
The owner of this well-performing investment has since tapped into its equity twice in two years in order to purchase more properties for his portfolio.
DON’T SHY AWAY FROM A NEUTRAL CASH FLOW IF THE DEAL LOOKS GOOD
Negative cash flow is not the same as negative gearing. We don’t suggest you buy to negatively gear, however sometimes a good property may have a neutral to slightly negative cash flow before tax. This doesn’t mean you should dismiss it. The important thing to remember when investing is to buy in line with your strategy.
Have a vision of what the property may be worth in the short and long term, as well as a good idea of rental prospects.
The investor who purchased this property did so because he realised it was what he needed in his portfolio. He was able to take quick decisive action after making an educated decision and working out how it would fit into his plan.
The decision certainly paid off!
Have you purchased a slightly negative cash flow property that has turned positive in a short amount of time? Let us know about it below.