These are the holy grail of investment properties – the properties that put money in your pocket (after expenses) rather than it costing you money.
The trick is finding them, a lot of new investors have trouble coming across them, most likely because they don’t know how to look for them.
So lets find them:
Have a strategy and goal – You need to know what you are looking for, otherwise all properties may or may not fall within your search field. What yield are you looking for? What properties tick the boxes?
Don’t rule out options – If you are comfortable with some debt and you can manage it well, you could open up more opportunities by investigating debt funded properties. The debt would cover the short-fall.
Research – Check all the information and look for the highest ‘averages’ for the areas you are interested in. If you select Melbourne as your city for example, then investigate which suburbs provide the highest average returns and then look at those areas or locations nearby for possibilities.
Get to know your Agents – Get to know agents in the areas you’re interested in, real estate agents know the area, they know the sales history and also what is expected to happen. Use their knowledge.
Make friends with the Internet – You can use Google Earth to really investigate an area (if you don’t know it personally). Also set up Google Alerts for information about listings in areas you are interested in.
Get to know us – property managers – We know which areas are in high demand, and what tenants are looking for. This is especially true if you would like help from a property manager in managing your property.
It can’t hurt to be bold – If you come across a property that isn’t strictly in your strategy, but has a higher than usual returns, consider making an offer. The offer has to be something that you can live with, which is likely to be on the low side. Can’t hurt to put in an offer – as long as you stick to your guns!
Creativity is rewarded – Don’t just look for the usual houses and apartments, you might come across something like a church, a school or a motel, which has outstanding returns. How many rentals could you make out of a school? Just think a little differently and you never know what you might be able to come up with.
So there are a few good ways to come across the elusive positively geared property, do you have other wasps you’d like to share?