Finding positively geared properties for sale is not as easy as it used to be, not by a long shot, but it is possible. Not just possible, but once you have found the way to source these properties, you'll be amazed that you haven't found it years before. Before I go on with too much more excitement though, let me just backtrack a bit and talk a bit about what positive gearing actually is.

What does Positively Geared Properties actually mean?

It's all about tax really when it comes down to it – that and cashflow. Ever heard of positive cashflow property? Well this is the same. All it means is that after expenses are deducted from the income you get from the property, you still have something left over. The opposite (negatively geared property) is when you have to supplement the income from the investment to pay its expenses. Sounds silly? It is – and here's an example to prove it.

Real Estate (36317)

Examples may make it clearer

Let's say I have a house that brings in $200 per week in rental income and costs me $190 per week to maintain (in loan repayments, rental management fees etc) – that's what people mean when they talk about positively geared properties. If on the other hand the property costs me $210 per week to maintain, that means I'm supplementing the investment (by adding $10 per week out of my own pocket) – and that's called negative gearing. A negatively geared property has tax advantages, but I'd much rather the positive cashflow each week, but that's just me.

Tell me how to find positively geared properties!

Ok then – local knowledge will always be better – think about it – a great real estate which delivers a regular stream of positive cashflow is probably not going to be broadcast nationally or internationally on the internet – unless you're looking an private sale websites – that's a different thing entirely. I'd recommend looking at local classified advertisements at local shopping centres or in community newspapers. Ultimately these sort of real estate wonders will not be advertised widely – I know of a real estate investment partnership that went door to door when they started out, looking for real estate deals in a particular neighbourhood they identified as a desirable investment location. It worked for them – they got a few leads and secured two cashflow positive properties from that one day doorknocking alone.

Money Tree (36318)

Real estate really is a wonderful investment, and can be so profitable, potentially in both the short and long term through a combination of positive gearing and capital growth. Of course there is always the potential that your cashflow positive property will not increase in value as expected, but who cares? Seriously, it's not that bad to have an investment that pays for itself, and returns profits to your pockets to do as you see fit. If you're creative and resourceful, you will find such properties around – just look. Enjoy!