Skip to content

Property Post GFC

November 11, 2011

WHAT ARE INVESTORS DOING?

Hey guys, the Global Financial Crisis flattened the economy, wiped profits off superannuation funds, property prices dropped – some investors are forced to sell up.

Here we are in 2011, with our property portfolio trying to anticipate what will happen next in 2012.

  1. Rents are not keeping up with rising costs
  2. Capital growth used to double every 7 – 10 years, it is now flat or dropping.
  3. How do we manufacture capital growth and manufacture extra cash flow?
Many investor groups are suggesting consolidation, so I developed a spreadsheet that doesn’t rely on capital growth any more, but cash flow. ¬†Although there are many promoters of Cash Flow properties, I wasn’t one of them, I was of the Capital Growth persuasion. Now I have had to abandon this idea of living off capital and realise that there is only one good type of property – a property with positive cash flow.