Dax Stanley explains that capital growth and cash flow aren't either-or choices. Major cities like Sydney and Melbourne deliver 6-7% annual growth, while regional areas offer better cash flow but minimal appreciation. The best strategy balances both by finding properties in capital cities that generate solid rental income and long-term price gains.
Chapters
Foreign. Ask a few times from current clients around what's best for their portfolio right now, should we be looking for capital growth or cash flow? And it's a really interesting question and a lot of people don't understand that they're not mutually exclusive. You can have both here in Australia. And it's really key to understand that balance and how that reflects in your portfolio to get your maximum growth out of that and onto your future self funded retirement. So let me go into it. Capital growth is all about focusing on how much the property increases over time each year. And look, we focus on things that are growing at a good rate, 6 or 7% on average over a long term like 20, 30, 40 years, a couple of property cycles. And we want to make sure that that's solid because we want this investment to grow over time and hopefully build enough equity to get another one and another one. That probably means that the equity growth that we're looking for, the capital growth we're looking for, has to be in one of the capital cities down the eastern seaboard. So Sydney, Brisbane, Melbourne and maybe Adelaide. And that's where we focus on to make sure we get good capital growth. Now cash flow, the other side of things, cash flow. If you go out in the country, you can find great cash flow but no equity growth. The property market doesn't move very fast there, so you're not going to be able to release equity unless you do manufacturing equity. But yes, you'll get good cash flow. As soon as you go closer into the city, the cash flow decreases and the equity increases. So there's this balance that we need to find that matches your portfolio. Now to have both, you want to be in one of those major capital cities and you want to get good rental based on the value of the property. So you get that cash flow every month in your pocket, reduce your taxes, you know, and be able to pay off your home quicker because that cash flow can go straight into there. So cash flow is king for making sure that you can increase your wealth, pay down your loans, but also the equity, so we can go again. So I hope that's helped you now know you can have both, which is really beneficial for all of us. If you need any help with this, if you want to find that needle in the haystack that works for both of those capital growth and cash flow, give us a shout post below. Love to chat to you and see how we can help you. Thank you. Have a great day. Bye. Sat.
