Tag Archives: positive cash flow

Investing for Positive Cash Flow

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Investing for positive cash flow (also known as positive gearing) means buying an investment property that has a high enough rental return in order to cover all holding expenses and still have some cash left over.

This is easier said than done.

In most capital cities, rental yields average around 5%.  Therefore if you are paying 7% on your mortgage and 1% for other expenses (such as insurances, council fees, body corporation fees etc) you are making a 5% minus 8% equals -3% cash loss.  That is negative cash flow and you have to put in your own money every month to hold onto that property.