19 Jun 2017

Strategies for Income Producing Properties That Really Work

When analysing cash flow positive properties, you will find they come in two main categories:

  1. Direct Cash Positive
  2. Manufactured Cash Positiv

Direct Cash Positive

Direct Cash Positive are properties that, from the day you buy them, are earning you a net profit after all expenses.

These are the ‘little gems’ of investing. Simply by buying the property you have created an immediate passive income. This means you don’t have to get out of bed in the morning to be earning an income from that source. After all, isn’t this what everyone is striving for – passive income that comes into your bank account no matter what you do for the day?

Now, I’m not saying it should be your goal to set all this up and then lie around in bed all day, but wouldn’t it be nice to be able to do whatever you ‘wanted’ to do rather than what you ‘have’ to do.

I know many successful investors who have done exactly that. Instead of doing nothing, however, they are now fulfilling life dreams such as going sailing for months on end, being able to choose not to work so that more time can be spent with family and friends. Perhaps you have bigger goals of setting up orphanages in countries of child persecution, or a refuge. One of my doctor’s clients has the desire to have the financial freedom to work on a voluntary basis for three months of the year in under-developed countries.

Passive income is what enables these sorts of personal goals to be fulfilled. I challenge you to really think about what your accomplishments will be when income is no longer an issue for you!

Financial freedom gives you choices. What will you choose to do with your time and Let’s milk the Cash Positive!

Manufactured Cash Positive

Manufactured Cash Positive on the other hand, are properties that may not necessarily be cash flow positive when you buy them, but you are able to do something to the property to increase its yield or earning capacity.

Some of the ways to manufacture additional income from a property might be to:

  • Physically change and improve a property so that it is more desirable to tenants and can command a higher rental This might include, for example; a cosmetic makeover or the addition of an extension, garage or a carport.
  • Additional services may be offered on the property such as high speed internet connection, cable TV and perhaps pool or garden maintenance. These additional services may be able to be negotiated at a lower cost to you in exchange for a long term contract with the provider and a premium for the services can then be added to the
  • Quite often when you buy a property, the rents have not been kept at current market rent rates and an increase is in fact way overdue.
  • Sometimes all it takes is a good clear out and scrub in order to command a higher rental
  • Perhaps a property on a large block of land (particularly a corner block or a block with two street frontages) can be utilised for rentable storage space, i.e. storage sheds or vehicle storage, which will provide another stream of
  • Offering a property for rental on a room by room basis, providing the facilities such as bathroom, laundry , are easily accessible by all tenants, can increase your income greatly.
  • Often the room configuration of a residential property can be easily adapted to convert the property to a dual occupancy; thereby, doubling your income per

We always recommend that you seek professional advice as this blog is for general information only