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Buying an Investment Property with Positive Cash Flow

Blog by | March 7th, 2014

INVESTORS: You only need 0.75% to achieve positive cash flow.


People used to say you needed 1% but given the historically low interest rates that rule no longer holds true.


Here are the numbers: based on the 1% rule for property purchased for $100,000 you would need $1,000 per month in rental income to cover all of your expenses (i.e. mortgage, property taxes, insurances, etc.).


Let's do the numbers with 0.75%: You purchase a property for $100,000. You earn $750 per month in rental income. Your mortgage is 100% financed at 3% would be $474.50 per month which leaves $272.50 per month for taxes/insurance and a profit!


If you put 20% down on the $100,000, your mortgage payments would be reduced to $379 per month.


If you have a $300,000 mortgage your 0.75% =$2,250 per month needed in rental income to generate positive cash flow.


YES - there are many properties available in the Okanagan that will give you a positive cash flow!



Alexandra Axsen

Owner/Managing Broker

Lake Okanagan Realty

Tel: 250.870.2792

Fax: 778.484.5252

506 Doyle Avenue

Kelowna, BC V1Y 6V8