5 Money Making Steps To Reversing A Negatively Geared Property In One Month

Investing in property is one of the most profitable avenues to venture into. As an investment, it has several advantages over other business opportunities including rental income, increase of investment due to appreciation, investment through value addition, cushioning during inflation and increase of the owners equity (difference between the market value of the home and the loan outstanding) upon servicing of loans. 

However, these advantages may fade in the face of current economic hardships and government interference. (The government in Australia is said to own more than 72% of the land according to Common Sense magazine by Viv Forbes). In the midst of these hardships, many property owners are now exploring other ways to reverse the losses that they are incurring from their properties.  

If you find yourself in this situation, here are some 5 steps that you need to adopt to change a negatively geared property into a positive cash flow property...

1. Improve Management 

Management is one of the ignored aspects of property ownership. Negatively geared property is usually a result of poor initial choices including location, acquisition fees and disrepair. Further investment failure arises when these are combined with poor management. It is critical that owners avoid the idea of limiting their possible earnings by concentrating management within themselves and family members. Family members are not always the most qualified to make the dispassionate decisions that professional property managers can.  

If you choose to personally finance your property to another individual, management of the property becomes even more important.  The good news is most people who desire to have a wrapped mortgage often treat the property as if it was their own simply because one day they will have the required equity in the property to get bank finance etc. Which means your house will be their house, which is why wraps are a great win-win for negatively geared property.

2. Opt for Property Wrap 

Property wrapping enables you to start making a profit much more quickly because you don't have to wait on title searches and bank red tape. With a property wrap option,  the purchaser can literally sign a contract with you and you can make money that very day itself.  

3. Recondition / Remodel Your Negatively Geared Property

This is one of the easiest means of improving the market value of your Negatively geared property; a well presented property will instantly command a better price in the market. As with everything else, first impressions do count when it comes to property.  

Identifying your target occupants plays a significant role when refurbishing your property. Are you looking to attract families, college students or expatriates?  

While you may want to keep the décor modern and contemporary for younger couples, a more country décor would be a better option for families. Expatriates on the other hand will have other preferences. A good agent will assist you in identifying the likes and dislikes of your prospective tenants. 

It is equally important to keep in mind that refurbishing a property to sell is different from refurbishing a property that is being rented. Renting may require flashiness in terms of a quick painting job while selling demands an element of durability.   

If you choose to go into a house wrap with a buyer, there are other special considerations.  The wrapee may find things in the home that they feel should be remodeled or changed.  This can be a great opportunity for the seller to get the property improved very cheaply or even free of charge depending on your agreement with the potential buyer.   

Many buyers are willing to do the work if you provide the materials, and a serious wrapee will do the renovations, repairs, or improvements without asking for a dime.  It is to their benefit to better the property if they are sure they want to buy it out right somewhere down the road.  

If they do not end up purchasing the property, they have still improved the property for it to resell.  Just be careful to stay on top of any changes done to your property while it is under a wrapped mortgage.  Most changes will be beneficial to both parties, but make sure any changes are done properly and the décor remains neutral and appeals to a maximum amount of future potential buyers. 

4. Let out the Extra Rooms 

In Australia, properties with extra rooms have increased dramatically since 2001. These provide the owner with an option of renting the extra. One of the major advantages of this option is that it is easy to find occupiers who will have fewer rights as opposed to full tenants. Setting of ground rules is, however, advisable.  

Better yet, if you find you can create an extra room in your negatively geared property , it may be a great property to wrap.  You can sell it to an individual who actually needs that much room, and purchase another property for yourself.   Property wrapping will provide you with immediate extra cash flow to help you pay the mortgage on your personal home.   

5. Petition for Better Accompanying Amenities 

The location of the property is a great determining factor as far as the sale price and rent is concerned.  Property owners who may not have purchased or built in areas that have attractive facilities may form unions to improve the basic amenities of their locations.

Security, water, sewerage, electricity and roads are some of the most important considerations. The pushing of agendas through government authorities is also easier if the pressure of unions is brought to bear on governmental authorities.  If you choose to finance the property to another individual, make sure you choose someone who wants to help in the fight to better the community as a whole. 

The good news you don't have to just put up with negatively geared property because as you've read above with a little bit of thinking and planning you can turn around your negatively geared property into a positive cash flow property.

 Who else wants more property investing advice and positive cash flow property investing tips? Join hundreds of other successful property investors who have already read Paul Zalitis' new report "Six Figure Positive Cash Flow Secrets" - Get your copy here for FREE today by clicking this link...  Negatively Geared Property