Having a quick look on www.realestate.com.au you will see there are several properties that can provide you with neutral/positive gearing. Have a look below at a list of properties with their figures and gross yields for each of them. These are all simple calculations and using a spreadsheet was able to take only a minute to generate them. Note these are all free standing houses so have no strata associated with them.
| House Cost | Rent Per Week | Gross Yield | Interest | Weekly Profit |
| $143,000.00 | $165.00 | 6.00% | $151.25 | $13.75 |
| $155,000.00 | $175.00 | 5.87% | $163.94 | $11.06 |
| $185,000.00 | $210.00 | 5.90% | $195.67 | $14.33 |
| $209,000.00 | $225.00 | 5.60% | $221.06 | $3.94 |
| $235,000.00 | $265.00 | 5.86% | $248.56 | $16.44 |
| $180,000.00 | $195.00 | 5.63% | $190.38 | $4.62 |
| $199,000.00 | $225.00 | 5.88% | $210.48 | $14.52 |
| $160,000.00 | $180.00 | 5.85% | $169.23 | $10.77 |
| $165,000.00 | $185.00 | 5.83% | $174.52 | $10.48 |
| $160,000.00 | $175.00 | 5.69% | $169.23 | $5.77 |
| $249,500.00 | $350.00 | 7.29% | $263.89 | $86.11 |
| $229,000.00 | $300.00 | 6.81% | $242.21 | $57.79 |
| $169,500.00 | $250.00 | 7.67% | $179.28 | $70.72 |
| $235,000.00 | $265.00 | 5.86% | $248.56 | $16.44 |
| $240,000.00 | $375.00 | 8.13% | $253.85 | $121.15 |
| $245,000.00 | $300.00 | 6.37% | $259.13 | $40.87 |
| $189,000.00 | $210.00 | 5.78% | $199.90 | $10.10 |
| $150,000.00 | $175.00 | 6.07% | $158.65 | $16.35 |
The interest is assumed to be 5.50% per annum.
As you can see, just having a quick look there are plenty of properties which can offer you positive returns. Now I understand that I have only done gross yield, and there are plenty of expenses that have to be accounted for that will severly reduce the overall yield, but hopefully even without some of these expenses the properties should be at least neutrally yielding.
It is also important to note that it is not always the best to go purely off yield as a figure, but sometimes a figure like weekly profit would also be a good test. In the above table, a higher yield does not always correspond to a higher weekly profit. And at the end of the day that is what is really important, getting that money in your pocket!
A cash on cash return is also a good way to check and compare properties, the following table does a cash on cash return with a couple extra assumptions. Assumes a deposit of 20%, additional purchasing costs of 5% (stamp duty, lawyer fees etc). And additional expenses such as property manager fees, insurances, rates etc of 2% of property value.
| House Cost | Total Purchasing Costs | Loan Size | Interest | Expenses | Gross Rent | Yearly Profit | Cash on Cash Return |
| $143,000.00 | $35,750.00 | $114,400.00 | $6,292.00 | $2,860.00 | $8,580.00 | -$572.00 | -1.60% |
| $155,000.00 | $38,750.00 | $124,000.00 | $6,820.00 | $3,100.00 | $9,100.00 | -$820.00 | -2.12% |
| $185,000.00 | $46,250.00 | $148,000.00 | $8,140.00 | $3,700.00 | $10,920.00 | -$920.00 | -1.99% |
| $209,000.00 | $52,250.00 | $167,200.00 | $9,196.00 | $4,180.00 | $11,700.00 | -$1,676.00 | -3.21% |
| $235,000.00 | $58,750.00 | $188,000.00 | $10,340.00 | $4,700.00 | $13,780.00 | -$1,260.00 | -2.14% |
| $180,000.00 | $45,000.00 | $144,000.00 | $7,920.00 | $3,600.00 | $10,140.00 | -$1,380.00 | -3.07% |
| $199,000.00 | $49,750.00 | $159,200.00 | $8,756.00 | $3,980.00 | $11,700.00 | -$1,036.00 | -2.08% |
| $160,000.00 | $40,000.00 | $128,000.00 | $7,040.00 | $3,200.00 | $9,360.00 | -$880.00 | -2.20% |
| $165,000.00 | $41,250.00 | $132,000.00 | $7,260.00 | $3,300.00 | $9,620.00 | -$940.00 | -2.28% |
| $160,000.00 | $40,000.00 | $128,000.00 | $7,040.00 | $3,200.00 | $9,100.00 | -$1,140.00 | -2.85% |
| $249,500.00 | $62,375.00 | $199,600.00 | $10,978.00 | $4,990.00 | $18,200.00 | $2,232.00 | 3.58% |
| $229,000.00 | $57,250.00 | $183,200.00 | $10,076.00 | $4,580.00 | $15,600.00 | $944.00 | 1.65% |
| $169,500.00 | $42,375.00 | $135,600.00 | $7,458.00 | $3,390.00 | $13,000.00 | $2,152.00 | 5.08% |
| $235,000.00 | $58,750.00 | $188,000.00 | $10,340.00 | $4,700.00 | $13,780.00 | -$1,260.00 | -2.14% |
| $240,000.00 | $60,000.00 | $192,000.00 | $10,560.00 | $4,800.00 | $19,500.00 | $4,140.00 | 6.90% |
| $245,000.00 | $61,250.00 | $196,000.00 | $10,780.00 | $4,900.00 | $15,600.00 | -$80.00 | -0.13% |
| $189,000.00 | $47,250.00 | $151,200.00 | $8,316.00 | $3,780.00 | $10,920.00 | -$1,176.00 | -2.49% |
| $150,000.00 | $37,500.00 | $120,000.00 | $6,600.00 | $3,000.00 | $9,100.00 | -$500.00 | -1.33% |
As you can see, when you do a bit analysis into the figures a lot of the properties start to give you poor returns, and are slightly negatively geared. Keep in mind that even the worst performing property above is only in negative about $1,700 per year, about $33 per week. But still, it is costing you money, not making you money! On the other end of the scale, there is a property that is earning you $4,140 per year, an extra $80 per week! It may not sound like a lot of money, but it is all passive income, money in your pocket for doing minimal work.
As I said at the start, finding positively geared properties is very difficult, the list of properties above, although looking at the gross figures appeared to give you positive returns all of them, with a bit of analysis, it showed that most of them were indeed negative, albeit not too badly. But the point to remember is that the positively geared properties are still out there! I searched for about 30 minutes to find this list of properties above, and only searched in one city. The analysis took a further 30 minutes, so one hour of my time and I can find a good positively geared property to help increase my real estate portfolio.
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