Welcome to 2007!
I hope you’ve had a happy start to the New Year wherever you are in the world today. I’d like to wish you a very happy, healthy and prosperous 2007!
My wife and I went to a friend’s place last night and we had a very enjoyable evening. At this New Years Eve party, we met Russ and Jaquie who run a swimming pool business. Jaquie told us that she would be celebrating her 65th birthday in mid January and was hoping to cut down her workload to maybe 2-3 days a week soon. They drove a late model Mercedes Benz coupe and they looked like they were very successful in their business.
During the evening, Russ asked the party hostess about the average house prices in the area. He was told that in that part of town, average house prices were around $450,000. “Hmmm”, he said, “I wouldn’t invest here.”
He didn’t know who I was and about my interest in real estate and I just listened intently to what Russ and Jaquie told me. They said that in addition to their swimming pool business they also had a keen interest in real estate investing and that they liked positive cash flow real estate. Well that was definitely a group of people after my own heart! 
They said that they buy houses in country towns for around $50,000 - $60,000 on average, and spend about $5,000 doing cosmetic renovations for a $120 - $150 a week rental return. They said that many of their tenants are school teachers, nurses and tradespeople with regular incomes.
Jacquie said: “The thing I like about theses types of tenants in the country properties is that they don’t ring you up every 5 minutes asking for a light bulb to be changed. They are generally quite resourceful people who are used to taking care of things themselves. They look after the property and pay the rent on time. That’s all we want.”
I was at the party to have a good time and not to “talk shop” to just one couple all night so I didn’t pursue the real estate talk.
What is interesting however, is that in just a few minutes, Russ and Jaquie explained their strategy, spoke about why positive cash flow works so well and why it didn’t make sense to invest in “pretty houses” with poor returns. They gave examples of some of their friends in Sydney who were really struggling with their investment portfolios because they were focused on just the capital gain at the expense of the regular cash flow rental returns.
They were not afraid to travel away from where they lived to invest in property. They were willing to go to wherever the good deals were. That’s one of the things you need to be willing to do if you want to be a successful property investor.
After watching my FREE real estate investing DVD, some people say to me: “but I can’t find any positive cash flow properties where I live!”
That may be true, but who says you have to invest where you live?
Russ and Jaquie live near the Hawkesbury River, Sydney. I’m sure they live there for lifestyle reasons and not because that’s where they want to invest. I live on a 435 acre farm at least 40kms away from the nearest large town. Other successful investors live in high priced suburbs in their favourite city or town. Just because that’s where you choose to live, that doesn’t mean it’s the best place to invest!
If you want to catch fish, you have to go where the fish are.
If you want to invest successfully, you have to go where the best deals are!
For smart investors, 2007 will be a great year. My family and I certainly have some very exciting plans for 2007. How about you? Will you make this a great year for you and your loved ones?
Will you commit to learning more this year and perhaps learning new things this year?
Technorati Tags: cash flow, negative gearing, positive cash flow, property investing, property investment, real estate, real estate investing, real estate investment
Warm Regards,
Hans Jakobi - Australia's Wealth Coach