It’s a common question and one which is very important to
answer before embarking on a new investment: Will the cash flow from
this property be sufficient to service my financial requirements?
After all, understanding cash flow can be the difference
between a solid long-term investment and a costly mistake.
To understand the cash flow on a potential investment
property, your accountant can work out the interest, estimate depreciation, and
give you an idea of the cash flow for the property.
You should have the property inspected, and if possible, check
any Body Corporate records, as this could help you find out about any big
maintenance or structural repairs planned.
If buying that property will put a strain on your finances,
then you need to move on and find a property with better cash flow.
While crunching the figures, you can also work out if you’ve
taken into account all the costs and outgoings, and work out whether you have a
financial buffer in place to manage any shortfall.
This is when you want to factor in possible interest rate
rises and potential vacancies, and again highlights the need to set up a cash
flow buffer in the form of an offset account or line of credit.
With RealRenta, you can efficiently manage various types of
properties, including residential, commercial, share, and student
accommodations. Our platform makes property management accessible and
affordable, costing less than a cup of coffee per week.
We also offer a free version for you to explore. I encourage you
to check it out and see how RealRenta can simplify your property management
needs.
Jason Gwerder
Sunday, 10 May 2026
