I wouldn’t invest in property, but I am saying this is definitely a possibility that you need to consider when investing in property. Because if you’re investing in negatively geared properties hoping for capital growth forever and day, that might not happen. And what if Steve’s right? What if in a few years, the market does crash and.
you’ve invested negatively geared properties for capital growth and all of a sudden, you’ve got a property that is worth less than what you paid for it and you have to pay every single month because the property is negatively geared. It kind of reinforces what I’ve been talking about for.
years, anyway, which is one of the benefits of positive cash flow property is that you can continue to make money in whatever market.Steve talked about how rents don’t change as much when there’s a massive property crash.
Yes, they do decrease, but unlikely as much, because rents are more directly correlated with the income, rather than with how much people can borrow. So that was exciting to hear me talking about positive cash flow properties for all these years because we are preparing for this situation, if
the property market does crash or does go down, how accurate are online home valuations whether a burst and we’re losing %-% in a very short period of time, or maybe it stagnates or maybe it drops slightly. If we got positive cash flow property that is generating our income, hey, at least we can afford to pay our mortgage and hopefully we’re still making a profit on top of that as well.
Whereas people who are solely reliant on capital growth won’t in as good a position.So, positive cash flow, at the moment now when everything is growing, everyone kind of puts positive cash flow to the side and says, “Well, that’s not really.
a viable strategy.I can make $, in a year by investing in the growth market that just happened in Sydney.” And they’re right. Look, if you can consistently get those sorts of capital growth, then good on you.