So far we’ve looked at granny flats and flipping, and this week we’re looking at those two words every cash flow investor wants to hear: positively geared.
A property is positively geared when the rental income exceeds your expenses, including mortgage repayments and maintenance.
Sounds good, but it’s not without its downsides.
“Where the return outweighs the repayment you often don’t get great capital growth,” Watt Realty CEO Justin Watt said. “This can include properties like units in a letting pool, motels and holiday lettings.”
So is it worth pursuing as a property strategy?
“The only way someone can buy residential property and get a positive return would be to add a granny flat, rent out a room or Airbnb it,” Justin said.
“You might get better capital growth and find it a lot let less stressful if you’re prepared to buy a property that’s neutrally geared or where you’re chipping in a little bit of your own money.”
Want to maximise your rental income? Talk to us about landlording.