Unlocking Cash Flow: The Ultimate Guide to Positively Gear Your Commercial Property
by Mish Daniel | Free Information
In this month’s video, we’re unpacking the world of positively geared property portfolios, revealing why they’re a financial game-changer for investors.
Mish Daniel, the founder of Revolve Commercial and a seasoned expert with over 35 years of real estate experience, has a wealth of knowledge to share. She excels in identifying and acquiring properties that generate positive cash flow, and transforming negatively geared portfolios into powerful wealth generators.
She knows how to turn your property investments into consistent cash-generating machines.
Whether you’re looking for ways to re-energise your property portfolio or just starting out in the vast world of real estate investing, Mish’s practical advice will unlock the secrets of wealth creation, helping you transform your financial future.
Listen to the full conversation below, or keep reading.
Challenging ideas for using negatively geared property as a strategy
In the past, many people chose negatively geared properties to offset high taxes, particularly in a growing market. However, property acquisition can be time-consuming, and giving back 70% of your profits to the government is not ideal. It’s much better to keep the 70% profits and only return the required 30% in tax.
Even though it’s challenging to find positively geared properties in our current uncertain market, especially with rising interest rates. The rule that ‘cash is king’ still applies. And prioritising cash flow over capital gains remains a more sustainable and profitable strategy.
Case Study: Positively Geared Property in the Factory and Industrial Space
We are thrilled to share a case study of a recently handled positively geared property that perfectly exemplifies an ideal investment. The property, located in a prime and highly visible location, became an irresistible investment opportunity due to its alignment with industry zoning, secure and long-term lease, and highly desirable location.
In the current market conditions, this property emerged as a golden opportunity. Securing highly reliable tenants who committed to a recommended 5-year lease added to the property’s appeal, ensuring a steady stream of income for the investor. The property was acquired at a cost of $1.69 million and managed to generate an astonishing net income of $120,000.
Breaking this down further, with an annual cash flow of $92,000 and outgoings of just $13,000, this property boasts an impressive cash-on-cash return of 7.48%.
These numbers clearly demonstrate the lucrative potential of positively geared property investments.
Pivoting an Existing Property to a Positively Geared Property
If you’re an owner of an existing property portfolio, you have the power to pivot towards positive gearing. This can be achieved by actively reducing your property expenses or boosting your property income.
Reducing Your Property Expenses
Consider these three potent strategies for cutting expenses:
- Refinance: Now could be the perfect time to refinance your property, given the current rise in interest rates. Scrutinise different options, weigh them against each other, and secure the most favourable rates that are in line with your portfolio and serviceability.
- Secure a Stellar Property Manager: The key to reducing costs can be finding a top-notch property manager. Look for a professional who will take ownership of your property, ensure leases are upheld, resolve tenant inquiries promptly, and manage maintenance issues proactively.
- Keep Tenants on Track with Outgoings: Don’t forget the importance of making sure that your tenants pay their outgoings promptly and that you’re receiving the appropriate incremental rental increases. Conduct regular lease reviews and keep a meticulous ledger to track all adjustments and details.
Improve your Property income
Alongside reducing expenses, another powerful strategy to pivot towards positive gearing is to proactively enhance your property income. Here’s what you can do:
- Reassess your rent: Think about your rental rates. Are they competitive? Are they reflecting your property’s true value? By regularly reviewing and adjusting your rent in response to local market conditions, you have the potential to maximise your rental income and draw in quality tenants.
- Add value to the property: Don’t just rent out spaces; consider how you can amplify their appeal. When a tenant leaves, take that as an opportunity to upgrade – a fresh lick of paint, modern fixtures, or even reconfiguring larger spaces can do wonders. By tailoring your property to meet local tenants’ preferences and providing enticing features, you can command higher rental rates and generate more income.
- Improve your tax situation: The tax benefits associated with property ownership can be significant. Have a tax depreciation schedule at your fingertips and claim deductions for your property’s depreciation. Track all improvements you make, like installing energy-efficient systems or sprucing up common areas, as they might be eligible for tax deductions. Consulting with a tax professional can reveal more strategies to reduce your tax liabilities and increase your overall property income.
Buying a Positively Geared Property
Buying positively geared properties can be complex and time-consuming, especially when identifying potential issues within the property, leases, tenant intentions, or hidden agreements.
The best way to achieve consistent cash flow and gain financial freedom through positively geared properties is to work with a buyer’s agent. They can provide much-needed personalised guidance, expertise, and access to opportunities that align with your goals.
You don’t have to navigate the complexities of positively geared property acquisition alone – our team at Revolve Commercial is here to support you every step of the way.
We understand the unique challenges and considerations involved in acquiring positively geared properties, and we’re dedicated to making your commercial real estate journey hassle-free.
With our industry expertise and unwavering commitment, we’ll help you build a prosperous property portfolio that generates consistent cash flow.
At Revolve Commercial, we prioritise your wealth and success above all else.
Get in touch with our experienced team today, and let’s work together to drive the growth and profitability of your property portfolio!
Remember, we’re here to help you succeed in the world of commercial real estate.
If you have any questions – book a no obligation 15-minute chat with one of our experts at Revolve Commercial. In this call, we’ll address your questions and map out what your potential next steps are to growing your wealth portfolio.
Don’t wait – book your free call today