Best ideas on how to turn negatively geared IP's to positive cash flow

Hello Everyone,

Just a general discussion to get a bunch of ideas on how I can possibly turn Two IP's I currently own that are negatively geared to a more neutral or possibly even positive in the near future.

They are both relatively old houses, built in the 1970's 3 bed and 1 baths. Looking for unique ideas that anyone has done before.

Thanks in advance!

 

Renovate - nicer properties will always rent for more and generally attract a longer term tenant which is worth something in itself.

 

Cheers DT, whats your experience been with doing reno's? Would you usually save cash and reno or finance the renovations?

 

if someone has done them before then they’d hardly be unique, would they?

For some ideas to turn neg geared property to be positive cas flow you either have to reduce your expenses or increase revenue or both.

Reducing expenses: refinance to a cheaper interest rate or change to IO or both. Self-manage - sack your PM. Do your own maintenance- sack the handyman.
Increase income - jack up the rent (after a cosmetic reno). Rent by the room. Airbnb.

These are just a start.

 

Pay down the loans.

 

stop claiming the expenses would do it.

But the goal should be to maximise the income while minimising expenses.

 

I see what you’ve done the @Terry_w

 

Depends on how big the difference is outputs to income.
Sometimes no matter what you do you cant make it up unless you either dump a heap of money onto the loan to reduce.your repayments
You could spend $5 or 10 k and do a refresh and update kitchen but then still only.increase rent by $ 20 or 30 a week depending on location.
Can you sell one and pay the other off completely?

 

I agree with this - the most assured way is to pay down the loan or keep the cash in the linked offset account, which in turn will then help making the property becoming positive. And it's completely within the investor's control on how much to pay down/keep in offset

Every little bit helps and eventually when you reach a point the two properties will provde you great returns @Mark Smith.

Cheers,
David

 

No. I would rather put spare funds into a linked Offset.

 

That pays of your ppor

 

It would depend on your individual cash flow situation. I use cash when we have it. Finance for investment isn't necessarily a bad thing - especially if the increased yield with better rent is equal to or greater than the cost to borrow the funds. The cost of borrowing may be reduced depending on your income and tax bracket.