Why Units Are Less Likely To Be Positive Cash Flow
b'ARVE Error: Mode: lazyload not available (ARVE Pro not active?), switching to normal mode\\n\\n\\n\\n\\n\\n\\n\\n\\n{"@context":"http:\\\\/\\\\/schema.org\\\\/","@id":"https:\\\\/\\\\/onproperty.com.au\\\\/why-units-are-less-likely-to-be-positive-cash-flow\\\\/#arve-youtube-be5zvmpps5e659a0b2dbfafc647252351","type":"VideoObject","embedURL":"https:\\\\/\\\\/www.youtube-nocookie.com\\\\/embed\\\\/Be5ZVMpPS5E?feature=oembed&iv_load_policy=3&modestbranding=1&rel=0&autohide=1&playsinline=0&autoplay=0"}\\n\\n\\n\\n\\n\\nUnits and apartments are less likely to be positive cash flow when compared to houses. This is because they have a body corporate or strata fee that strips a good chunk of your cash flow.\\nTranscription:\\nDid you know that units are actually less likely to generate you a positive cashflow than houses? That\'s something that a lot of people don\'t think about when they\'re looking for positive cashflow property. Hey, I\'m Ryan from on-property dot com dot EU. I help people find and invest in positive cash flow properties and today we are going to be looking at this exact topic, why it\'s harder for units to generate a positive cash flow than it is for houses and it\'s really, really simple. And so if you\'re out there searching for positive cash flow properties, then you might want to be looking at houses instead of units. Units can still generate a positive cash flow property. Don\'t get me wrong, they still can, but there\'s just an extra element in there that makes it harder. So let\'s jump into some examples that I have here. So I found this property here, one 95 ps street in Boulder, who I didn\'t even know, where boulder, who is the example like where it is, doesn\'t really matter for this example.\\n\\nOkay? It\'s near Calgary or in Calgary. Um, okay. So we\'ve got this property that\'s selling for $159,000 and it is renting for $250 per week. So we\'re going to jump over to property tools.com dot a u, which is a calculator that I created myself for analyzing the cashflow of properties. And so let\'s have a look at this $159,000. And this one is renting for 2:50 per week. So 2:50 per week. We can see that we\'ve got an eight point one, eight percent rental yield and a weekly cashflow estimate of about $17 50 per week for this property. All right, so this is a house. Okay, I\'ve got another example here. That\'s a unit that has a very similar rental yield. It\'s actually more expensive and as we talked about in episode four, 99 on how rental yield isn\'t the be all and end all of finding positive cash flow properties.\\n\\nThe more expensive a property becomes and the more rental income you\'re generating, the less rental yield you need to generate a positive cash flow. So the fact that this property is more expensive and it\'s generating three, 10 per week in rental income rather than to 50 should main, it\'s more likely to generate a positive cash flow with a smaller rental yield. So let\'s go ahead and check this one in $200,000 renting for three, 10 per week. We can say the rental yields eight point, oh, six percent. So slightly lower than the last one, but not a big deal. And we can see the weekly cashflow is estimated at about $39 per week. And here\'s the ticker. Here\'s, here\'s the reason why units can be harder to generate a positive cash flow. If we scroll down here and we zoom in, we can see here body corporate levies of 2000, $131 per annum.\\n\\nNow, if you don\'t know what body corporate levies are, they\'re often called body corporate fees, body corporate levies, or strata fees. Now this is a fee that you have to pay when you own a unit. When you own townhouses, when your own villas, when there\'s common areas that you share with other people. So you pay body corporate fees or strata fees, and so this pays for the maintenance and the repairs of the common areas. So the driveways that you all share, the gardens that you all share, the elevator that you share, if you live in a large unit block, maybe even pools and gyms, all of this sort of stuff. So body corporate levies go towards that.'