When to ignore that red flag – and when to take heed Most of us know what a positively geared property is: broadly speaking, it’s an investment that delivers ongoing cash profits to you, once all the ownership expenses and taxes are accounted for. BY HELEN COLLIER-KOGTEVS A positive cash flow property is even better than a positively geared property, as it’s an asset that pays you cash each week, even without the benefit of depreciation and other tax deductions. In both cases, positive properties put cash back in your pocket and sometimes this concept scares people off. There’s a good reason for this: our instincts are designed to fire off a red flag when something is presented to us that seems “too good to be true”, too polished or too perfect. I think this red flag is a good thing. If you listen to your gut instinct, it means that you won’t be caught up in shonky investments and real estate scams. You know the ones – they look all shiny and bright on the outside, but with their golden promises of sky-high rent guarantees and bogus capital growth claims, at the end of the day they are designed to rip you off. That’s not to say that every deal that looks “too good to be true” is really a scam. It is possible to make exceptional profits out of property, especially in mining towns, when a newly announced billion-dollar project kicks off a population surge and subsequent property boom. So how do you tell the difference between a bogus property claim and a genuine opportunity to create real wealth? It’s simple: you don’t take any information at face value and you do your own personal due diligence, to ensure the deal stacks up against your own criteria. This one action will help you to navigate the property market and evaluate potential deals – specifically high-return mining town opportunities – with confidence. Until next time, happy investing. Helen realwealthaustralia Helen Collier-Kogtevs is a bestselling author, educator, speaker and property investor. Her passion for wanting to make a positive difference to people’s lives inspired her to create mentoring programs that teach people how to retire on $100k plus with 10 properties in 10 years or less.
Posted on: Mon, 13 Oct 2014 02:16:20 +0000
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