Recent Buying Selling Lifestyle Investment Cash-Flow Property Management Rent Tenant
Recent Buying Selling Lifestyle Investment Cash-Flow Property Management Rent Tenant
Investment Cash-Flow Property Management

How Investors Can Generate Positive Cash-Flow From Real Estate

Real Estate investing has proven itself to be a useful tool in many investors’ assets mix. It is often seen as a good addition to a range of strategies people may pursue as part of a good financial plan. Successful Real Estate Investing involves more than just buying a property and waiting for it to rise in value.

Paul Hartgers, Principal of 1on1 Property, has been dealing with professional property investors over many years and has had a front-row seat when it comes to witnessing successful approaches to real estate investing.

Adding Value to a Property

Paul says the recent tremendous growth experienced in our capital cities has led to a relative scarcity of inexpensive property in locations that would be an obvious pick for property owners seeking good investment income.

“Because properties have become more expensive to buy in the cities the best way to achieve positive cash-flow sooner is to look at property at the cheaper end of the market. You can find some of these kinds of properties further out from the city in places like Newcastle, Lake Macquarie and the Hunter.”

Once you have chosen the right property adding value can be an excellent way of generating higher rental income.

“After finding one of these cheaper properties one of the key ways to generate positive cash-flow is to increase the income you can generate by adding value for tenants. This might be through minor renovations like painting, new carpet, or perhaps a newer kitchen or bathroom. It may even be as simple as adding an air conditioner, as people are willing to pay a little extra rent to stay cool in our hot summers.”

Generate Extra Income

It is possible to find extra ways to generate income from property – even if the property has tenants occupying it and paying rent. Paul says that with some creative thinking it is not difficult to extra income sources from the one lot.

“Another way investors can generate positive cash-flow is by looking at the income side and trying to bring in extra income. Investors may build a granny flat on a portion of the property and let that out, for example, or rent out the garage space for storage separately.”

Paul has even seen properties facing busy roads sell some of the front fence for advertising space. It is important to check local council regulations, but, if it isn’t banned by the council it may be one more way a property can make investment income.

Buying in the Right Area

Paul says one thing that distinguishes good property investors is their knack for being able to purchase properties in areas that are more likely to generate positive cash-flow from the beginning.

“If an investor is interested in owning a cash-flow positive property from the start they need to look away from areas that are seeing big rises in capital growth because owning investment properties in those areas will likely see the property become positive cash-flow after two to three years – perhaps longer.”

“We are seeing positive cash-flow properties in areas like Glendale and Edgeworth; further up in the Hunter Valley, areas like Cessnock, Kurri Kurri and Abermain it is still possible to find properties that could generate positive cash-flow from the start.”

Properties further away from the headline-stealing capital growth stories, like Newcastle and Merewether, may still provide the investor with capital growth in the long-term. If investors can’t afford to wait for a property to become cash-flow positive, though, it is essential to buy in the right location first.

“If you buy a property in the right kind of location, add value to enhance the rental income you can receive from a tenant, and explore every option to earn extra income, it is possible for your real estate investment to remain a positive cash-flow investment all the way through your ownership experience.”

Good Property Management

“Good property managers are crucial to making a real estate investment work, “says Paul. “They can help advertise and select tenants, ensuring you have a tenant that is going to look after your investment. Good property managers will help you manage the tenant relationship to your benefit all the way through the tenancy."

“Good property managers will help collect rent, liaise with tradespeople to manage repairs and maintenance, and even represent you should you need help with a tenancy that has become troubled. They help you steer your investment property through the market.”

Do you need assistance with your investment property? Do you need assistance with your investment property? Call one of 1on1 Property’s expert Property Managers today on 02 4014 1900.

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