An interesting article was published by Tim McIntyre on RealEstate.com.au a few days ago regarding the use of positive cashflow investing to build a large property portfolio - https://www.realestate.com.au/news/simple-trick-to-building-a-property-empire/.
It speaks of the benefits of only purchasing properties that are positive cashflow to ensure the investor can maintain his/her serviceability to continue growing their portfolio. This is one of the reasons most investors are generally 'tapped out' after purchasing 1 or 2 investment properties as their borrowing capacity is capped due to their portfolio being negatively geared.
This is a great idea and something many will have considered as a viable investment strategy, however is it still an effective strategy given the current high prices of Australian real estate? Finding an investment property with a positive rental yield is getting harder, even in some regional areas where median prices have grown so rapidly that the rental yields have deteriorated over time. It's become even more difficult due to the current high interest rates environment.
An excellent positive rental yield may not always provide the greatest capital growth over time, although it is of course absolutely possible through doing solid suburb and property research.
In Steve McKnight's excellent book '0 to 130 Properties in 3.5 years' he talks about buying his first investment property in Ballarat for $44,000 with 10%+ rental yield and great capital growth potential - https://www.amazon.com.au/130-Properties-3-5-Years-ebook/dp/B008A31QTS.
Do such opportunities still exist? We are keen to hear your thoughts.