Positive cash flow is the ultimate goal for investment property in Australia. When your rental income exceeds all costs like mortgage repayments, maintenance, and other expenses each month, your properties act as self-funding assets that build wealth.

This guide will explore multiple strategies for achieving positive cash flow on your properties, even with higher purchase prices or interest rates. Applying these tips can help you assemble a portfolio of long-term holds generating consistent passive income.

 

Maximise Your Rental Income

The starting point for positive cash flow is securing the highest possible rent your property can achieve. Here are some tips:

  • Research average rental yields in the suburb to price competitively
  • Offer furnishings or small upgrades to command top-dollar
  • Review rents quarterly and increase to market rate when possible
  • Keep vacancy periods short by utilising property managers

 

Reducing Operating Expenses

While maximising income, simultaneously minimise expenses:

  • Shop around for low property management fees if using an agent
  • Negotiate discounts on maintenance and repairs with vendors
  • Handle basic maintenance or cleaning yourself when feasible
  • Insure your property appropriately – don’t overpay for premiums

 

Leveraging Tax Deductions

One of the biggest benefits of investment properties is the tax deductions available to offset costs:

  • Claim interest expenses on your loan as a tax deduction
  • Write off management fees, maintenance, insurance, utilities, etc.
  • Maximise depreciation by having a schedule completed every 3-5 years
  • Offset deductions against rental income to lower taxable amount

 

Building Equity

Consistently paying off your investment loan builds more equity in the property over time. You can leverage this in multiple ways:

  • Refinance at a lower rate to reduce interest expenses
  • Access equity to fund upgrades like a granny flat for higher rent
  • Use equity as deposits for additional properties
  • Draw equity to pay down debts with higher interest rates

 

Key Takeaway

With the right financing, property selection and tax planning, positive cashflow is achievable on investment properties even in competitive markets like Australia. Follow these tips to ensure your portfolio cashflows positively each month for sustainable long-term wealth creation.