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Cash flow Negative

A property is cashflow negative if the figure left after all the property related expenses (i.e. Rates, Interest payments, Principal payments, Repairs and Maintenance, Property Manager fees, Insurance) have been subtracted from total rent (in some cases + tax rebate) is negative (See Cashflow).

As such cashflow negative properties cost money to hold. Investors in cashflow negative properties typically rely on the property rising in value at a rate that outstrips the holding costs. As such these properties are often in "good areas" or areas perceived to have high rates of capital gains.