My phone rings quite a bit. That’s a good thing. And Cash Flow is the number one topic for most real estate investors calling me lately. I’ve written before how Cash Flow Before Taxes is one of the Four Benefits of Real Estate Investing. I’ve also written about why you may not wish to worry too much about Cash on Cash returns if you are looking to really get your money working for you.
I am a real estate investment consultant. I advise. It’s what I do. But I am also a real estate agent. I sell homes. It’s how I’m paid. So unless people are too far outside the scope of my core beliefs when it comes to real estate investing I help them meet their goals…after at least having a say in what I think. But make no mistake, if cash flow is what you are after I will help you find the best rental properties for that purpose that I can.
Now I do draw a line. I don’t work with rental properties priced below $30,000. I just won’t as a general rule. Because these houses are typically in neighborhoods where I don’t see any kind of long term growth. (I have sold properties under $30K. They just weren’t in neighborhoods I don’t like.) I don’t advise working in certain neighborhoods where retention of tenants is low and where there is a history of roller coaster appreciation/depreciation. How can that be to your advantage unless you think you can time the market? (That hasn’t worked out too well with many, many people.)
I still believe you want to look at an investment property in it’s entirety.
- What are the long term capital growth projections with all 4 Benefits calculated?
- What does the cash flow look like when all expenses are calculated/projected?
- Is this neighborhood on the upswing or is it slipping?
- Nearby jobs, development and schools matter.
If you are looking at Cash Flow as your major driver for your next investment property go ahead and give me a call today at 913.322.7515. I’ve identified a couple of good neighborhoods that stand up to the four bullet points listed.