If you are a beginner in the real estate investing business, then you must have heard about positive gearing. However, what is positive gearing? And how can you find a positive geared property for sale?
So, in this blog, we are going to talk about how to find a positive geared property for sale. But first, we will go through the meaning of positive gearing in real estate investing as well as the factors that make it the best investment strategy for beginner investors. Then we are going to answer the question: What strategies to go with when looking for a positive geared property for sale?
First: What are positive geared properties in real estate?
Positive geared properties are also known as cash flow properties. They are properties that generate more rental income than what you have to pay for the loan and other expenses. These expenses include repairs, maintenance, and property management services. Of course, the rental income that the property generates does not exclude taxes. So, basically, you make money each month out of such properties.
Second: What is an example of positive geared properties?
Let us suppose that you buy a property worth $250,000. You let in tenants for $1,500 a month. You have loan payments for $500 a month in addition to $300 in other expenses. Therefore, you are left with $700 in cash flow each month.
Third: Why should you invest in positive geared properties?
Passive income: Positive gearing provides you, as a real estate investor, with a passive income. You get to keep some money instead of paying out of your own pocket. It also helps you pay the loan payments in addition to expenses and still have some extra. You also get to choose what to do with that extra money. An option is to use it for your own lifestyle and achieve financial freedom. You can also use it for paying the loan faster. Or you get to use it in expanding your investment business by purchasing more rental properties and therefore growing your real estate investment portfolio faster.
Support you through tough times: Well, this is for those who are investing in real estate while having a career. Positive gearing will support you in case you financially suffer in your career. If things go wrong and you quit your job, you will not have to worry about paying your bills. Your rental property will generate passive income that will cover up for your expenses, while you pull yourself back together.
Income stability: With positive gearing, you know how much and when you are getting paid. You know how much extra money you will have each month. Another thing to consider in terms of stability is that the positive gearing market is stable. By that, we mean that your rental income is not going to suffer even when the market is going down.
Forth: How to find a positive geared property for sale?
Of course, education comes first. You have to know what you are doing and how. Learn more about positive gearing and decide first whether you have interest in it or not. If this investment strategy does not complement your goals, then stop wasting your time. If you are interested, on the other hand, keep on reading our next strategies for finding a positive geared property for your investment business.
Know what you want:
In order for you to find a positive geared property for sale, you have to decide what kind of property you want to invest in. For example, do you want to invest in a single-family home? Or do you want to purchase a multi-family home? Or do you want to start with an apartment building at once?
Deciding what kind of property you want to invest in is a key element in this process. It will make it easier for you to find the right positive geared property for your investment business.
Search urban markets:
The urban markets are the best places to start searching for a positive geared property for sale. The reason you should look into urban markets is that the process is easier, while they generate higher rental income. However, this does not mean that you can only find a positive geared property is in urban areas. You can also find them in cities and in the suburbs of the cities. But they are more common in urbanareas.
Therefore, when you are looking for a positive geared property for sale, you need to consider a few factors. First, you have to make sure that the area is or will be experiencing a long-term population growth. Second, check its job growth rates. You must look into it in the long term and not the short term. Third, what does the local economy look like? Is it growing at a good pace? And is it diverse and strong?
Remember, these are factors that greatly affect your real estate investment business. They will determine whether a certain positive geared property for sale is the right choice for you or not.
Subscribe to online real estate services:
You must know by now that there are plenty of websites that provide real estate services for investors. Subscribe to one of those websites and look for properties that are listed on them. You can also find a positive geared property for sale through Mashvisor. Sure enough, you can find what you are looking for.
Talk to your real estate agent:
If you do not know how to find a positive geared property for sale, then ask your real estate agent. Real estate agents are experts on such matters, and your agent should be able to help you find one for you.
Even though a positive geared property for sale is hard to find, if you follow our advice, you will be able to find one. Make sure you have your goals identified so that you know that the investment property you find is the right one for you. After all, your main purpose of investing in real estate is making money. Therefore, investing in positive gearing is the best strategy for you, especially, if you are a beginner investor in real estate.