A property that is positively geared can be described as an investment property that earns more rental income than expenses.
A positively geared estate (also known as a 'cash flow property') is an investment that generates more in rental income than it costs in loan repayments, strata fees, and other expenses associated with ownership.
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Positive gearing deals with properties before and after taxes are accounted for. Positive cash flow is generally applied after taxation.
How to Find a Positively Geared Property?
1. Consider Your Finances
A huge determining factor in the positive cash flow of a property is its financing expenses. Properties with high positive cash flow are usually well-financed, with little burden on the investor.
Real estate investors thus need to build up their credit scores and finances to secure mortgages with smooth terms. Good credit scores, cash reverses, and other financial requirements will be needed to have lower mortgage payments, which will allow investors to find a positively geared property much more easily.
2. Find a Rental Market
Once your finances are in check, you can begin to search for areas that will have a positively geared property. The easiest and most effective way real estate investors can do this is to perform a real estate market analysis.