Makeover Your Investment Property’s Cashflow

Makeover Your Investment Property’s Cashflow

The first step to understanding how Melbournians maximise their investment property cashflows is to understand what a cashflow positive investment property is and how these investment properties can best be optimized to generate income.

Simply, a cashflow positive property is one where the rental income exceeds the costs of owning the property (such as interest, maintenance, rates, management fees, etc).

To maximize the amount of rent you can charge, while at the same time minimizing the number of days that their property sits vacant, pro-active landlords renovate their properties to make sure they are attracting their target market at the right target price.

An example of how a renovation can help a landlord increase his or her cashflow is the simple act of putting up a simple stud wall in order to convert a two-bedroom house into a three-bedroom home. Such a change could very easily have a property, depending upon its location, renting at least two weeks faster than it otherwise would and take in an extra $250 a month. For a property renting at $1500 a month, this would be an increase in one’s cashflow by $250 each month along with the $750 that’d be earned by having the property renting two weeks sooner.

RentBuilder recently had a client who followed our guidance to make such an improvement in her investment property in Melbourne. She financed the adding of a bedroom to her investment property by borrowing $30,000 at 7.5% per annum. To pay for this renovation, she has to pay back $2,250 per annum or $190 per month. However, she was able to increase her rent by $500 a month, which works out to a positive monthly cashflow of $310.

Furthermore, this monthly $310 is more than just an increase in our client’s cashflow, she can also leverage it to increase the size and the power of her investment property portfolio.

If you’d like to learn more about maximizing your cashflow through the use of investment properties in Melbourne, Australia call 1300 768 464 or contact us for more information.

 Makeover Your Investment Property’s Cashflow