Thinking out of the box for cashflow

[Purple Property]

Looking back through old books, articles and posts, it seems 10 years ago all one had to do for yield was buy a property in a main centre, a bit run down and then do a renovation and build a fence perhaps to get good yields.

Now however, I'm having to resort to going to the likes of Owhata, Fordlands, etc in Rotorua with multiple income properties just to get a half decent yield.

One has to question whether property is still the golden goose it used to be? Very difficult to buy cashflow positive after all expenses without having to resort to buying in the sketchy parts of town.

[Davo36]

Yep. Too much money floating around the world looking for a home.

[AlFa]

I play in Vegas and relocatable houses in average to good areas were pretty solid performer in last 2 years both income and equity.

[Nick G]

Asset prices have gone up as the cost to borrow has gone down. Rents have not kept pace and yields have dropped. Some people still expect a vendor to sell them a property at 8% when lending rates are 4% and we have so much demand for property.

It is a lot harder to just buy a house and expect a good yield. In saying that, we are still finding them. Many good deals are now had by creating the yield or equity, which is a good mindset to have for existing properties because you'll do well in a hot market and even better in cool ones. I got caught out by the 40% deposit requirement like anyone else and have keep going by adding 50%-70% value to each purchase, while adding cashflow to keep leverage risk down.

[Purple Property]

Asset prices have gone up as the cost to borrow has gone down. Rents have not kept pace and yields have dropped. Some people still expect a vendor to sell them a property at 8% when lending rates are 4% and we have so much demand for property.

It is a lot harder to just buy a house and expect a good yield. In saying that, we are still finding them. Many good deals are now had by creating the yield or equity, which is a good mindset to have for existing properties because you'll do well in a hot market and even better in cool ones. I got caught out by the 40% deposit requirement like anyone else and have keep going by adding 50%-70% value to each purchase, while adding cashflow to keep leverage risk down.

What sort of deal adds 50-70% value?

[Nick G]

One that adds 50-70% more rent.