Investments with Higher Returns
Are you looking to build a property portfolio which will bring higher cash flow then your current investments and at the same time creating serious wealth in 3, 5 or even 7 years time?
Solvista Developments has helped our investors find and developed properties bringing better and higher cash flow.
Wealth acceleration through positive cash flow investments
Most property investors eventually hit a wall. They save diligently, acquire one or two properties, and then the bank declines the next loan application. The ambition of building a multi-property portfolio stalls — not due to a lack of determination, but because of limited borrowing capacity.
The good news? There is a proven way to overcome this barrier.
The Positive Cash Flow Method enables investors to:
- Establish the correct structure, whether a trust or company entity.
- Acquire the right type of property.
- Introduce a secondary income stream to elevate rental yields into the 5.5–6% range.
- Recycle borrowing capacity and repeat the process.
Set Up The Right Structure
The first step is establishing the appropriate structure. Many investors utilise a trust or company structure for potential benefits such as asset protection and tax flexibility. It is essential to seek personalised advice from a qualified tax professional and lawyer, as not all structures are equal. The right structure will depend on your individual circumstances.
Purchase The Right Property
Not every property is suitable for this strategy.
To execute it effectively, the following criteria must be met: the property must be located in a zone that permits the construction of a secondary dwelling or granny flat, there must be strong tenant demand for both the primary and secondary residences, and the entry point should deliver an initial yield in the range of 3.5–4%.
As an example, consider a property purchased at $800,000 with a weekly rental income of $550–$600 for the main dwelling, producing a starting gross yield of approximately 3.6%.
Contact Your Broker/Bank
Consult with a licensed mortgage broker or credit provider to determine whether refinancing or additional lending is appropriate for your circumstances. With higher yields and stronger cash flow, your serviceability position improves.
In addition, equity is created through the process:
- Market revaluation: $1.2m–$1.25m (depending on location).
- Equity uplift: $125k–$175k above total costs.
This enhanced income and equity position strengthens your borrowing capacity, making lenders more willing to extend further finance.
Purchase, Construct, Rent and Revalue
Now it's possible to apply the process to the next deal.
The Process:
1. Establish the appropriate entity structure.
2. Acquire a property with granny flat potential.
3. Construct a secondary dwelling.
4. Enhance rental yield and generate equity.
5. Refinance the property.
6. Purchase again.
By repeating this process three to four times, you can strategically build a portfolio with stronger cash flow to support future borrowing capacity, subject to prevailing lending criteria and market conditions.