Positive cash flow investment properties
are those properties that offer a greater income than the expenses required in
maintaining the property. In other
words, it means that the rent that you attain from the property should cover
your loan payment to the bank and other expenses involved in the maintenance
associated with the house. Of course, if you pay an extensive down payment with
your own cash, in one sense the property may be a positive cash flow, but it
may not be the case, if you consider the opportunity cost associated with the
cash spent. Maybe you could have obtained more if the money was invested elsewhere.
There are several factors that you
need to consider while hunting for a positive cash flow investment property.
They are:
- The amount of rent that you will obtain from the
property. Rental rates depend on the structure and the area of the property.
Location is also vital as the rent depends on this as well. A good location will fetch you sufficient
rents and will help you fill your property consistently, thereby maintaining a positive cash flow on that property.
- The other factor which is important is the
amount of your mortgage. This amount will fluctuate with the changing interest
rates and market values. The key is to ensure that you have enough margins
built in order to be able to maintain a positive cash flow even during an
economic crisis. Seek guidance from a professional, who can help you through
the process of buying a positive cash flow property.
- The next factor which is vital is the operating
costs required to maintain the property. Positive cash flow properties will require you to keep it in a top notch
condition at all times. Properties that require regular repair work will not
get you the best value. Therefore,
invest in the best properties in the first place in order to keep the operating
costs minimal.
- The last factor is to find a company that can
manage your property in a good way and offer you the best possible value.
These are some factors which you
need to keep in mind while hunting for a positive cash flow property. It is not
easy to find positive cash flow properties in today’s times. Either the
property is in the outskirts which will not yield you a good value or the
property is old which requires a lot of maintenance. But a skilled property dealer will be able to
find a positive cash flow property from time to time.
These are some factors which you
need to keep in mind while hunting for a positive cash flow property. Either
the property is in the outskirts which will not yield you a good value or the
property is old which requires a lot of maintenance. But a skilled property dealer will be able to
find a positive cash flow property from time to time.
Mr (john cruz) lives in the cincinnati, is a real estate broker, invester, owner and operator. He recently started Middle Class Millionaires to teach the basics ofcash flow game.