One of the often-requested, but hard to achieve, objectives from investors is to buy a property for them that will be cashflow neutral or cash flow positive, in its first year.

In any large capital city, this cash objective (gross rents less running costs, less interest) is largely a myth. I do know a high rent suburb where I can buy with good cashflow, but warn my enquirers that the property will probably not go up in value. Some may choose to still go ahead on the basis that earning, say, 3% on a Bank Deposit earns your no capital gain either!.

I may lose a potential client with my response but, so what, I would rather not get the phone call in two years saying “Mike, no capital gain!”. For all our investors, we produce a First Year cashflow estimate using our copyrighted Strategic Property QuickCalc so they have good idea of how the property should perform in Year One.

For smaller budgets, we are one of the few buyers’ agencies in Victoria that have market knowledge and connections to give a broader choice for investors, to achieve cashflow and a capital growth. This is because we cover Melbourne and our selected Regional Cities. (We also are a member of the private Interstate Buyers Agent network providing access to buying in Brisbane, Gold Cost and Sydney.) Out of Melbourne we only buy in our selected regionals, certain property types, and only in selected suburbs.

We have just bought for an investor a tenanted cashflow positive 3 BR house in Ballarat’s most expensive suburb. Fantastically located in Lake Wendouree, in walking distance to city shops, lake, and hospitals (big employers). And we achieved cash flow neutral, maybe better.

If you want to know more, get in touch: mike@strategicbuyersagents.com.au

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