Hi guys,
While Im no property investor, many of my friends are, and quite often I over hear them speak of the shortfall in income with investment properties. As in, the rent not covering expenses such as mortgage repayments, rates and so forth. I have intensions within the future to become involved in property - however I am curious to know how it is possible to continually buy properties when there is this continual shortfall in income?
Obviously if the properties were cashflow positive then buying properties one after the other is no concern, but when theres a definite shortfall, obviously maintaining serviceability - whether it be on the loan itself or maintenance on the property or perhaps something else - how is this acheivable?
I guess I have begun referring to it as "bridging the gap" as in eliminating this shortfall - but how is this done?
After having read Peter Spann's book it seems he was able to do this by investing in shares that offset his IP expenses.
Is this a legitimate way of approaching this? And if so - what sort of figures would you have to invest towards generating an income to do so? And would this income be monthly or yearly or what???
Also, it seems that many highly successful investors began off by selling their properties - as in - quick renovations and selling outright. Surely there must be some truth to this being a consideration.
I guess in summary Im concerned that after having purchased X number of properties that Ill be sitting at home on the weekends eating home brand tuna and dry toast because of this shortfall in cashflow.
How is it possible to continually buy renovate, rent or sell like the big boys?
RJ
While Im no property investor, many of my friends are, and quite often I over hear them speak of the shortfall in income with investment properties. As in, the rent not covering expenses such as mortgage repayments, rates and so forth. I have intensions within the future to become involved in property - however I am curious to know how it is possible to continually buy properties when there is this continual shortfall in income?
Obviously if the properties were cashflow positive then buying properties one after the other is no concern, but when theres a definite shortfall, obviously maintaining serviceability - whether it be on the loan itself or maintenance on the property or perhaps something else - how is this acheivable?
I guess I have begun referring to it as "bridging the gap" as in eliminating this shortfall - but how is this done?
After having read Peter Spann's book it seems he was able to do this by investing in shares that offset his IP expenses.
Is this a legitimate way of approaching this? And if so - what sort of figures would you have to invest towards generating an income to do so? And would this income be monthly or yearly or what???
Also, it seems that many highly successful investors began off by selling their properties - as in - quick renovations and selling outright. Surely there must be some truth to this being a consideration.
I guess in summary Im concerned that after having purchased X number of properties that Ill be sitting at home on the weekends eating home brand tuna and dry toast because of this shortfall in cashflow.
How is it possible to continually buy renovate, rent or sell like the big boys?
RJ