Forums / Property Investing / Help Needed! / how to id +cashflow properties ??

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• RickHy
Member
@rickhy
Join Date: 2003
Post Count: 39

Is there any formula that can be used to identify pos cashflow properties ?
Also I dont want to sacrifice capital gain for a small “[]ïn the pocket”profit.
Upto now we only have high CGrowth neg geared property and are looking to balance the books so to speak…. any help would be great

diclem
Member
@diclem
Join Date: 2003
Post Count: 537

Hello RickHy,
The most basic formula used is the 11 sec rule.
You take the rent, divide it by two and then multiply by 1000. If the asking price for the property is at or below this figure, you may have a cashflow positive property.
eg. Rent \$200/2= \$100, \$100 x \$1000 = \$100,000
This formula is used mainly as a filtering tool to ascertain which properties are likely to be positive.
Have a good search through old posts as this, and other formulas, have been discussed often.
Cheers,
Sue []

“Be careful not to step on the flowers when you’re reaching for the stars”

kay henry
Member
@kay-henry
Join Date: 2003
Post Count: 2,737

Sue,

I’m lazy- i just think- 50k house = \$100 a week rent. 100k house = \$200 a week rent :o) I just double the purchase price for rental income.

kay henry

diclem
Member
@diclem
Join Date: 2003
Post Count: 537

Hi Kay,
I’m the same[]
Just thought I’d better explain it properly[]
Sue

“Be careful not to step on the flowers when you’re reaching for the stars”

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