5 Ways To Increase Cash Flow as a Property Investor!
One of the key components of being a successful property investor is having a healthy cash flow.
More cash flowing in means more opportunity to invest to build a booming portfolio and live the life you want.
There are ways to increase cash flow depending on how you invest. Here I discuss some key ways to keep your cash flowing.
POSITIVE CASH FLOW PROPERTIES
Located in regional or agricultural markets, university areas or mining towns, positive cash flow properties are a great way to increase cash flow quickly but do carry a little bit more risk. The properties are usually low in purchase price and high in rent yield, but many investors don’t want to take on the risk of owning a property in a place with a sub-5000 population. Another positive cash flow property is a dual income home, where we have two tenants, paying two lots of rent, with one entrance. If you can purchase a house or property that has one front door but two dwellings inside, you can yield an increased cash flow through the rent.
DEBT REDUCTION
When we talk about debt reduction people automatically think about paying off their mortgage. What’s more important is reducing the amount of debt we owe, that’s costing us more than the value we’re getting from the actual purchase. A mortgage on a property that’s in a growth area and is giving you tax deductions and growing in capital wealth, isn’t cash draining debt. Your flashy car addiction or tendency to buy too many shoes might be. Look at your lifestyle and work out what you could easily change to curb spending and reduce your debt. Another way to reduce debt is to look at your loan structures. Most people are spending too much on their mortgage by locking themselves into interest rates that are too high. Talk to your broker or the experts at Positive Real Estate who can help you find a lower interest rate on your loans and increase your cash flow.
HARD PROFIT REAL ESTATE
Identifying markets with consistently high capital growth and buying real estate there is what we call hard profit real estate. Essentially, if you buy in the right area your property starts to increase in value immediately. You then regularly refinance to pull the equity out and use it to pay down other mortgages or buy another property. This approach does take some skills and experience, which the experts at Positive Real Estate have, so talk to one of our coaches to find out how to identify markets with high capital growth.
TRADING REAL ESTATE
We often talk about how property investing is a marathon, not a sprint, but trading real estate contradicts that slightly. Trading real estate means buying a property, adding some value, and then selling. You don’t keep the property, but essentially buy, hold and sell within 12 months. By doing this you reap the tax deduction benefits of having a property for more than a year, but don’t invest for long term capital growth. Adding value can be done through quick, easy renovations that don’t require costly, structural changes.
TAX DEDUCTIONS
One of the greatest ways to increase cash flow as a property investor is through tax deductions. The more properties you have, the more deductions become available and the higher the increase in cash flow, but even as little as two properties will enable you to reduce, claim and deduct tax that is going to be beneficial. There are techniques and strategies to reduce or even eradicate things like stamp duty, capital gains and land tax, but you don’t have to be a tax expert to learn about them. Talk to the experts at Positive Real Estate about the tax deductions that could work for you.
FREE TRAINING AVAILABLE
Learn more about how to increase cash flow and build your property portfolio at one of our free seminars.
Good property investors are nimble and adapt fast. They stay informed and enrol a team of experts to help them excel in times when others can’t. To find out how you can be one of those people, we’re running a free a property investing seminar.
Here you’ll be equipped with the tools, resources and support to thrive, and not fall behind on your path to financial freedom – whatever that may look like for you.
Book your spot now and find out what you need to know about the current market landscape and how you can make it work for the ultimate wealth creation opportunities.
By Sam Saggers
