PHOTO: It’s the holy grail of property investing — the elusive cashflow positive rental. Steve Goodey. FILE
📣 The Property Lie Investors Are Falling For? ‘Cashflow Positive’ Claims Under Fire
It’s the holy grail of property investing — the elusive cashflow positive rental. But according to high-profile investor and property coach Steve Goodey, some real estate agents are playing fast and loose with the numbers… and investors are being duped.
Goodey has gone public, calling out what he says is a disturbing trend in real estate advertising: bold financial claims that simply don’t stack up.
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🏠 Is It Really “Cashflow Positive” – Or Just A Marketing Fantasy?
“Cashflow positive” is supposed to mean the rent covers all outgoings — mortgage, rates, insurance — and still leaves money in your pocket.
But Goodey has found listings using the term without hard evidence, pushing properties that are nowhere near profitable under most standard conditions.
Take one Auckland unit advertised as a “solid home or cashflow positive investment.” Sounds good, right? Not so fast — Goodey crunched the numbers and found that for it to truly break even, it needed to be bought for no more than $405,000. The seller? They were asking $500,000.
“I’ve had agents tell me something is cashflow positive if you put 30-35% down in cash. Well, anything can be cashflow positive if you throw enough money at it,” Goodey said. “Are we just making stuff up as we go now?”
🧾 The Real Estate Authority Responds
While the Real Estate Authority (REA) wouldn’t comment on specific cases, CEO Belinda Moffat made it clear: marketing must be honest, verifiable, and not misleading.
“If a property is advertised as ‘cashflow positive’, the numbers must be able to be substantiated. Buyers should ask for evidence — and get expert advice.”
In short, if it sounds too good to be true — get it in writing.
🏚️ The Cashflow Trap: Real Ads, Real Losses
In another example, Goodey reviewed a listing marketed as “cashflow neutral” with a price tag of $699,000 — but when he ran the numbers, the property was projected to be $16,000 in the red annually.
Another property was marketed as “cashflow positive”… despite the fact it hadn’t even gone to auction yet. Goodey called it a reckless claim without a sale price to base the calculation on.
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🔍 Why This Matters: Investor Beware
Goodey warns that new and intermediate investors — especially those relying on generic advertising — are most at risk.
“There’s no accountability. Everyone shrugs and moves on, but people are investing their savings based on bad data and clever headlines.”
He’s now calling for greater enforcement, saying the current system allows too much wiggle room for sales-driven spin over financial reality.
🚨 What Investors Should Ask (Before They Get Burned)
If you’re eyeing a “cashflow positive” listing, ask for:
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📈 Full breakdown of income and expenses
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🏦 Mortgage scenario assumptions (deposit size, rate, term)
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🛠️ Realistic maintenance and vacancy rates
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🧾 Historical rent roll (not projections)
And most importantly, do your own modelling — or engage someone who can.
🔚 Final Word: Don’t Buy The Dream Without Doing The Math
In a hot market filled with bold claims and digital dazzle, ‘cashflow positive’ has become the new buzzword — and the latest buyer trap.
Steve Goodey’s message is simple: trust nothing until it’s verified. As he puts it:
“If we’re stretching definitions to make deals look better, we’re no longer selling property — we’re selling fiction.”
SOURCE: RNZ