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Cash flow Strategies...

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  • Cash flow Strategies...

    Hi All,

    I'm just considering getting into my first property investment and I'm keen to hear from people what cash flow strategies have been successful or unsuccessful in terms of yield or rental thresholds for buying and selling properties? I understand that the yield expectations will very dependent on the property location and type, etc.

    Also what type of value-adds people may use as additional criteria, such as; subdivision potential or additional capital opportunities on a site for example?

    Any tips or experiences (good or bad) gladly accepted!

    Thanks, Charlie.

  • #2
    Hi Charlie

    Most strategies you read about will have worked for some situations. I've done well out of adding extra bedrooms and bathrooms to existing properties (inner city). Others I know add a cabin (inner city) or a minor dwelling or even a relocatable house (further out in suburbs or a smaller town). You can often just increase the rent by furnishing (inner city / student) or renovating a bit... or to be honest even just putting the rents up to what the market charges. It is a horses for courses thing.

    The key is to spend some time working out what rents well and can lift the rent profitably (ie, your upside is more than the cost and it makes the property more desirable to tenants) in your area and then look for properties that present that opportunity.

    I find most (but not all) properties that are under-let and poorly maintained are self managed because people:
    a) equate having lived in or owned their own home with being qualified to manage an investment property and/or
    b) equate spending as little money as possible as the right way to do things

    Cheers

    Nick
    Free online Property Investment Course from iFindProperty, a residential investment property agency.

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    • #3
      Hi Charlie

      Like what Nick G said, adding bedrooms are the way to create extra cash flow or buying run down properties and then tidying them up, preferably with a cosmetic renovation.

      Relocating the laundry is the place to start or even taking away the dinning room and replacing it with a bedroom but again it depends on the market your in and whether the market will be receptive to this.

      Holiday / short term accommodation is also another good strategy, I haven't personally dabbled with that but the other investors I've spoken to have gone very well out of it.
      Fraser Wilkinson
      www.managemyrental.co.nz
      Wellington / Lower Hutt / Upper Hutt / Porirua

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      • #4
        Thanks for taking the time to respond, I appreciate it.

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