Investing In Rental Property gives you more positive cash flow

Rental cash flow is just one part of your property investment strategy – but it’s a very important part.

The best possible investment outcome for any property investor is a combination of decent house price growth coupled with rising income from your tenants. But how important is the rental yield component and how can you improve the return from your investment property?

My listing in New Zealand

The level of rental return you can expect from an investment property is determined by several factors, including location and the type of property, as well as overall economic conditions.

If you pay a high price for a house in a popular suburb, you would hope that rental demand is high enough in the area to offset your higher costs of ownership.

This is crucial to the success of a rental income strategy.

Many people measure their returns using gross rental yield*, which is a percentage figure calculated by dividing the annual income earned on the property by its sale price or market value.

Using the current market value can be helpful because if a property rapidly increases in price but the asking rent does not, then the annual return or yield will fall.

In cases where you already own the property, however, you’d normally use the price you paid for it to make your calculation.

How’s the property looking?

The condition of a property is also very important with regard to rental yield, because even in a high demand area, you’re not always guaranteed to have tenants. As a landlord, you can’t afford to let properties get scruffy if you want high occupancies and good yields.

Investing in a smart renovation can also improve your rental income, making it much easier to hold the property for the long term.

What should your cash flow be?

There’s no hard and fast rule to this. According to CoreLogic, the highest-yielding metropolitan suburbs last year ranged between 5-7% for houses and 5-8% for units, typically in outer suburbs where properties generally cost less to buy.

Consider looking at rental cash flow to determine the market value of an investment property, as opposed to ‘fair value’ assessments made by comparing them with similar properties. If its gross rental yield potential is likely to be below, say, 4%, there’s a chance it might be overvalued for investment purposes.

Conversely, if the gross yield is over 5.5% – and the rent is sustainable over the longer term – the investment property may be undervalued.

Units vs houses

In general, more compact housing such as units tend to offer higher rental returns than detached houses because the initial investment (i.e. the property’s purchase price) is lower.

This can especially be the case in inner-city suburbs that, in the bigger cities at least, are likely to be in higher demand. A large two-bedroom unit in inner Sydney, for example, may command the same rent as a two-bedroom terrace in the same suburb but cost several thousand dollars less to buy, thereby increasing the yield.

* Gross rental yield does not consider all ongoing costs associated with property investment such as repairs and maintenance, strata levies and rates. Net rental yield includes these costs and can generally provide a better indication of the financial viability of investing in a property.

But there’s something even bigger right NOW in the luxury vacation rental market…

Airbnb recently acquired “Luxury Retreats” for a little under $300M—they obviously know something, maybe something you don’t, or something you don’t know how to take advantage of.

A few days ago I read about this “new thing” and one of the big real estate company has seen it in action. A few handpicked Doctors, Entrepreneurs, Professionals, and Investors are applying this extremely powerful real estate “insider” system, making 6-figure passive incomes from luxury homes THEY DO NOT OWN!

It’s amazing!

There is one company that has developed a system that enabled them to acquire 2 “super properties” and $320,000 in revenue in only 6 months, and there are properties They DON’T EVEN OWN. No joke.

I believe in their mission, and they want to spread this secret to as many dedicated people as they can, before the real estate giants make a move.


Leave a Reply

Your email address will not be published. Required fields are marked *

RSS C J Investiment

  • Greatest Depreciation Impact on buying brand new property versus second hand property. September 17, 2019
    The recent depreciation changes have the greatest impact on the types of property you may choose to invest in. Some people prefer to invest in brand-new properties, while others opt for older property that they can renovate and resell for profit. Washington Brown, who are the property depression experts and accredited surveyors in Australia and internationally do […]
  • How to Use Leverage to Build Your Business Effectively September 7, 2019
    Leverage is simply doing more with less. When we mentioned leverage in this context, money is what people think of most often.  Loans, mortgages, other people’s money – all are forms of leverage based on money. While this type of leverage is important, it is equally important to use other forms of leverage in your business strategy.  Your Wealth Team Systems […]
  • Some incredible deals available for people who can refinance September 4, 2019
    The market is changing fast. Banks are again showing an appetite for interest-only loans again. And many lenders have reduced their assessment rates by up to 2.0%, which represents an increase of approximately 12-15% in your borrowing capacity. There are some incredible deals available for people who can refinance.  Secure a complimentary loan review with our JV partner, EK […]
  • World Recession and its impact on housing prices September 3, 2019
    According to economist discussions in many fora, recession is on the horizon. Well,let’s take an in-depth look at what’s occurred recently and in the past, so we can put your mind at ease about the word recession and its impact on housing prices. The official cash rate sits at 1 per cent. The Australian dollar fell to 0.67% […]
  • How I started Real Estate Business September 2, 2019
    Many people ask me why I started real estate entrepreneurship instead of sticking to my Nursing Profession. I tell them that as much as I enjoy my Nursing Career, the one disadvantage of it is that I trade my time with a dollar. That is if you don’t wake up to go and work, then […]
  • How to Sign a Rental Lease Agreement With Your Tenants September 2, 2019
    In order to sign a rental lease with your tenants, you will need to have – of course – a rental lease. You can get a state-specific lease agreement from a number of sources, such as Government Agencies or your attorney. Each Region has different rules and laws that govern the landlord-tenant policies in that state, so chances are a […]
  • How to Rent Your House to the Best Tenants September 2, 2019
    The most important decision you make that will determining the success or failure of your rental is the person you put in. A bad tenant can potentially cause years of stress, headache, and financial loss – while a great tenant can provide years of security, peace, and tranquility. Don’t underestimate the important of renting to only the best tenants.You are reading […]
  • Money Management Strategies for People In Diaspora August 31, 2019
    Here are some ways workers living overseas can manage and protect their money for better long-term financial health. Open a local bank account A local bank account can help you save money on extensive ATM fees. It’s also a good thing to have for making deposits each time you get paid. When you use a foreign card […]
  • The Single Most Important Step You Will Take If You Want To Have A Successful Website August 31, 2019
    Everyone is looking for a short-cut to online riches and yet over 99% of those people NEVER use the informational products and money-making tools that they’ve purchased. We get too busy, or too lazy, or we simply procrastinate so long that we forget what we were intending to do in the first place. While there are a lot of […]
  • Double Your Productivity August 26, 2019
    If you read one article before starting your week, read this one. Set aside a few minutes and focus. I am going to share some habits that I’ve implemented myself that have resulted in massively increased productivity for me! I learned this strategy from my business partner,the creator of Rehab Valuator,Daniil Klyman. This article will […]

Google Translator

Recent Posts

Our Agents

Charles Vincent Kaluwasha

President and Founder

President & COO, C J Investiment LLC. Charles Kaluwasha has been a part-time entrepreneur and investor since 2008. He currently…