October 16, 2018 Microcosm

Making Money With Positively Geared Property

If you’re sick of working long and arduous hours and want to put your money to work for you so that you can take a step back and work smarter, not harder, then perhaps investing in a positively geared property is the right option for you.

Though there are many investment options out there for intelligent investors, not everyone wants the stress of managing a high-risk investment portfolio, especially when changes in the stock market a world away could wipe out your financial position over night.

Positive Geared Property For Sale

A positively geared property is any property that can be rented out for more than the cost of its expenses. For example, you buy an older property in an undervalued but well-located area where you can earn high rental income. Maybe it’s in a good school zone that everyone wants to get into so you rent out the property to a family for $550 a week and the total expenses including mortgage repayments, real estate fees, insurance and council rates etc. come to $450 a week.

This means you’re earning $100 per week in rental income as well as any long-term increases in the value of the property. Not a bad position to be in! Perhaps this is why every smart investor wants to find a positive geared property for sale!

Where to Buy Positively Geared Property

Where to Buy Positively Geared Property

Now you’re asking the $64,000 question; where do I find a positively geared property? If only it were as simple and easy as logging on to a real estate website and finding a category for positively geared houses! Unfortunately, with the demand out numbering the supply, investors have to get their researcher hats on and find the needle in the haystack for themselves.

Finding the right positively geared property is half the battle and might entail tracking the growth of a suburb for a few months or buying in a suburb you know well. You might need to buy the worst house on the best street and spend some money smartening it up so that you can rent it out for the highest price possible. Or you could buy a small house on a larger property and add a granny flat.

The extra outlay might set you back $30,000 but might add an additional $300 a week to the future rental return as well as adding value to the property.

How to Buy Positively Geared Property

How to Buy Positively Geared Property

If you don’t want to wait for the perfect positively geared property to drop into your lap, there are ways that you can actively create your own little money spinner.

When you buy a property and divide it into two or more properties, you increase the amount that you can rent them for. For example, if you buy a large four bedroom home that could be rented for $600 a week and your total costs are $600 a week, then you break even. But if you spend a bit of money dividing it into two homes with two bedrooms each and you can rent out each property for $375 a week, then after costs are covered, you will eventually be making $150 a week profit.

And one bedroom homes actually rent for a decent sum of money too. A small one bedroom home, depending on the location, could rent for a pretty penny. In the city, these homes are snapped up by executives who will pay top dollar, and in the suburbs, they’re snapped up by university students, or doctors, nurses, teachers, or anyone who needs a place to drop their hat at the end of the day.

The most basic way to rent to singles is the boarding house method: you buy a four-bedroom home and decide to rent out each of the rooms individually for say, $150 a week. You have to hope that each of the tenants gets along and shares their space well. Sometimes this is easier said than done.

But there is a fantastic way that this kind of rooming house can work and reap the financial rewards, and we’d love to show you how.

At Modo Project Builders, we specialise in creating positively geared properties for investors. We regularly show astute investors how to buy positively geared property, and it’s not about waiting for the perfect property to drop into your lap.

We turn a single property into a money making machine! We do this by creating what we call ‘new generation boarding houses’ that house up to nine quality independent tenants, each paying for their own beautiful space. These boarding houses are not like anything you’ve seen to date. We help you to create one modern architecturally stunning dwelling with multiple income streams, and the income is nothing to be sneezed at.

With population growth in Melbourne reaching unheard of proportions, this style of accommodation is needed and highly sought after.

positively geared property

Safe as Houses

If you want a safe investment for the future, then you really can’t go past investing in real estate. No matter what happens in the global markets, property always increases over time; you just have to hold onto it for long enough. Even with ongoing speculation in the media about drops in the housing market, the situation in Australia is a stable, long-term investment and anyone with some financial nous and capital can get involved. Savvy investors need to thoroughly do their research and know what they’re getting into should any scenario arise and always have a backup plan.

When nervous investors with negatively geared properties run for the hills and sell up at the possibility of a downturn, they often have to cut their losses and take it on the chin. But this can be a great time for smart investors to jump in, snap up a bargain and create a solid long-term plan for positive gearing to ride out the environment of fear.

If you’d like more information about how Modo Project Builders can deliver you a positively geared property that will earn you money long into the future, please don’t hesitate to get in touch. We’ll show you examples that are currently reaping returns and get you thinking creatively about how you too can do the same.

2 of these…

Amount Total
$470 p/w rent x2 $940 p/w
$48,880 p/a 3.2% yield

Or this!

Amount Total
$300 p/w rent x9 $2,700 p/w
$140,000 p/a 9.4% yield

Contact us today to find out how we can help with your next property construction project.